Adaptive Experimental Design using the Propensity Score


Dean Karlan, Jinyong Hahn, Keisuke Hirano

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Karlan, Dean, Jinyong Hahn, Keisuke Hirano (2011) "Adaptive Experimental Design using the Propensity Score." Journal of Business and Economic Statistics, 29(1): 96-108. DOI:10.1198/jbes.2009.08161
Many social experiments are run in multiple waves, or replicate earlier social experiments. In principle, the sampling design can be modifed in later stages or replications to allow for more efficient estimation of causal effects. We consider the design of a two-stage experiment for estimating an average treatment effect, when covariate information is available for experimental subjects. We use data from the first stage to choose a conditional treatment assignment rule for units in the second stage of the experiment. This amounts to choosing the propensity score, the conditional probability of treatment given covariates. We propose to select the propensity score to minimize the asymptotic variance bound for estimating the average treatment effect. Our procedure can be implemented simply using standard statistical software and has attractive large-sample properties.
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