Aggregation Trees

Riccardo Di Francesco

No 546, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: Uncovering the heterogeneous effects of particular policies or "treatments" is a key concern for researchers and policymakers. A common approach is to report average treatment effects across different subgroups based on observable covariates. However, there is likely to be considerable uncertainty about the appropriate grouping. This paper proposes a nonparametric approach to discovering heterogeneous subgroups in a selection-on-observables framework. The approach constructs a sequence of groupings, one for each level of granularity. Groupings are nested and feature an optimality property. An "honesty" condition allows us to construct valid confidence intervals for the average treatment effect of each group. The utility of the proposed methodology is illustrated through an empirical exercise that revisits the impact of maternal smoking on birth weight.

Keywords: Causality; conditional average treatment effects; recursive partitioning; subgroups discovery; subgroup analysis (search for similar items in EconPapers)
JEL-codes: C29 C45 C55 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2022-12-15, Revised 2023-11-20
New Economics Papers: this item is included in nep-ecm
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