Looking Forward to Constructing Better Causal Comparisons

Augusto Cerqua

Papers from arXiv.org

Abstract: Constructing credible comparison groups is a central challenge in observational causal inference. Conventional approaches assess comparability through observed characteristics or pre-treatment outcome trajectories, although causal identification depends on unobserved untreated potential outcomes after treatment. We propose a forward-looking framework that selects or weights controls using prognostic scores: predictions, based on pre-treatment information, of the outcomes units would experience without treatment. These scores target either untreated outcome levels or changes, depending on the comparability condition underlying the causal design. They can be estimated using post-treatment outcomes observed for untreated units or exclusively from historical data. To construct these scores, we leverage tabular foundation models, whose extensive pretraining enables them to capture complex relationships among predictors and effectively extract their predictive information, even when application-specific samples are limited. Crucially, predictions guide comparison-group construction, whereas observed outcomes determine treatment effect estimates. We derive an exact decomposition of estimation error into prognostic-score imbalance and differences in forecast errors, clarifying why neither predictive accuracy nor score balance alone guarantees causal identification. The National Supported Work application reveals that stronger pre-treatment covariate balance does not necessarily yield estimates closer to experimental benchmarks, highlighting the practical relevance of prognostic-score comparisons.

Date: 2026-11
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