Compensation and Amplification of Attenuation Bias in Causal Effect Estimates

Marie-Ann Sengewald () and Steffi Pohl
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Marie-Ann Sengewald: Otto-Friedrich-Universität Bamberg
Steffi Pohl: Freie Universität Berlin

Psychometrika, 2019, vol. 84, issue 2, No 13, 589-610

Abstract: Abstract Covariate-adjusted treatment effects are commonly estimated in non-randomized studies. It has been shown that measurement error in covariates can bias treatment effect estimates when not appropriately accounted for. So far, these delineations primarily assumed a true data generating model that included just one single covariate. It is, however, more plausible that the true model consists of more than one covariate. We evaluate when a further covariate may reduce bias due to measurement error in another covariate and in which cases it is not recommended to include a further covariate. We analytically derive the amount of bias related to the fallible covariate’s reliability and systematically disentangle bias compensation and amplification due to an additional covariate. With a fallible covariate, it is not always beneficial to include an additional covariate for adjustment, as the additional covariate can extensively increase the bias. The mechanisms for an increased bias due to an additional covariate can be complex, even in a simple setting of just two covariates. A high reliability of the fallible covariate or a high correlation between the covariates cannot in general prevent from substantial bias. We show distorting effects of a fallible covariate in an empirical example and discuss adjustment for latent covariates as a possible solution.

Keywords: causal inference; measurement error; bias amplification; ANCOVA; propensity scores (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11336-019-09665-6

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