Dealing with limited overlap in estimation of average treatment effects

2009/01/24 by R. K. Crump, Richard K. Crump, V. Joseph Hotz +5 · 997 citations
Mathematics · #Advanced Causal Inference Techniques #Computer science #Economics #Estimation #History #Library science #Management #Miami #Statistical Methods and Inference #Statistical Methods in Clinical Trials

paper · open access · doi:10.1093/biomet/asn055

published in Biometrika 96(1), 187-199 (Oxford University Press)

openalex publication_date 2009/01/24 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04

Abstract

Estimation of average treatment effects under unconfounded or ignorable treatment assignment is often hampered by lack of overlap in the covariate distributions between treatment groups. This lack of overlap can lead to imprecise estimates, and can make commonly used estimators sensitive to the choice of specification. In such cases researchers have often used ad hoc methods for trimming the sample. We develop a systematic approach to addressing lack of overlap. We characterize optimal subsamples for which the average treatment effect can be estimated most precisely. Under some conditions, the optimal selection rules depend solely on the propensity score. For a wide range of distributions, a good approximation to the optimal rule is provided by the simple rule of thumb to discard all units with estimated propensity scores outside the range [0.1,0.9].

Citations

• The central role of the propensity score in observational studies for causal effects

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