Matching Methods in Practice
Causal Question / Estimand
The ATE under unconfoundedness — a hands-on guide translating the theory of Imbens2004-NonparametricATEReview into a recommended workflow, worked through three examples (including the Lalonde/Dehejia–Wahba data).
Identification Strategy
Same selection-on-observables foundation — Ignorability plus Overlap. The contribution is procedural: (1) assess and trim to ensure Overlap; (2) estimate and check the Propensity-Score for covariate balance; (3) estimate the effect with a method that is robust to model misspecification — Imbens recommends combining matching or subclassification on the propensity score with regression adjustment (a doubly-robust, bias-corrected estimator); (4) run supplementary analyses probing the plausibility of unconfoundedness (e.g. pseudo-outcomes, placebo treatments).
Key Assumptions
Ignorability (unconfoundedness), Overlap, SUTVA, and adequate covariate balance after conditioning on the Propensity-Score.
Threats to Validity
Limited overlap (the most common practical failure) — addressed by trimming/discarding units outside common support; reliance on a single estimator without robustness checks; unconfoundedness itself, which is untestable but can be stress-tested.
Setting / Data
n/a — methodological/practitioner guide; illustrated on the Lalonde (1986) NSW data in the Dehejia–Wahba version.
Key Claims
- Always inspect overlap first and trim before estimating; poor overlap is the leading source of unreliable matching estimates.
- Combine the propensity score with regression adjustment for robustness rather than relying on matching alone.
- Although unconfoundedness is untestable, partial assessments (placebo outcomes, estimating “effects” on pre-treatment variables) raise or lower its credibility.
Connections
- Builds on: Imbens2004-NonparametricATEReview, Ignorability, Overlap, Propensity-Score
- Empirical cautionary counterpart: SmithTodd2005-ReconcilingPSMEvidence (matching’s sensitivity to specification and overlap)
- Implementation companion: CaliendoKopeinig2008-PSMImplementationGuidance. See also PSM
Citation
Imbens, G. W. (2015). Matching Methods in Practice: Three Examples. The Journal of Human Resources, 50(2), 373–419.