CAUSAL INFERENCE

Propensity Score Matching

Transform observational data into causal insights by creating statistically balanced treatment and control groups

What Makes This Powerful

Covariate Balance

Creates statistically equivalent groups by matching on propensity scores, reducing bias from confounding variables. Shows before/after standardized differences.

Causal Effect Estimation

Calculates Average Treatment Effect on Treated (ATT) with bootstrap confidence intervals, showing the causal impact of treatment on your outcome.

Comprehensive Diagnostics

Propensity score distributions by group, love plots showing balance improvement, common support assessment, matching quality metrics, and sample attrition analysis.

What You Need to Provide

Required Data Structure

Your data needs a treatment_column (binary 0/1 for control/treated), an outcome_column (numeric result to measure), and multiple covariates (pre-treatment characteristics for matching).

Data format: Each row is one unit (customer, patient, etc.). Include all variables that might influence who gets treated: age, income, prior behavior, risk factors. The algorithm uses logistic regression to estimate propensity scores, then matches similar units.

Minimum requirements: At least 50 treated and 50 control units, ideally 1000+ total observations. Need at least 2-3 covariates for meaningful matching. More covariates improve balance but require larger samples.

What you get: Average Treatment Effect on Treated (ATT) with confidence intervals, balance diagnostics showing covariate improvement, matched dataset for further analysis, visual diagnostics including love plots.

Dataset Schema Preview

Quick Specs

Columns treated, outcome, 3+ covariates
Sample Size 1,000+ rows recommended
Outcome Numeric outcome column
Defaults method=nearest, caliper=0.2, ratio=1

How We Create Causal Evidence

A rigorous statistical pipeline that transforms raw observational data into reliable causal estimates

1

Propensity Score Estimation

Uses logistic regression to calculate each unit's probability of receiving treatment based on their covariates, creating a single balancing score for matching.

2

Matching & Balance

Create comparable groups using nearest-neighbor or caliper matching, then verify covariate balance through standardized mean differences and overlap diagnostics.

3

Treatment Effect Calculation

Computes Average Treatment Effect on Treated (ATT) using matched samples, with bootstrap confidence intervals (1000 iterations) for robust uncertainty estimates.

Why This Analysis Matters

When randomized experiments aren't feasible, this method isolates true treatment effects from selection bias, enabling confident causal conclusions from observational data.

Critical for decisions like expanding policy changes, optimizing marketing campaigns, or evaluating medical interventions. By enforcing statistical balance before comparison, we answer the fundamental counterfactual question: "What would have happened without the treatment?" This transparency, combined with visual diagnostics, builds stakeholder confidence in data-driven decisions.

Key Assumptions: No unmeasured confounders (all relevant variables included), stable unit treatment values (SUTVA), and sufficient propensity score overlap between groups.

Ready to Find Causal Effects?

Turn your observational data into actionable causal insights

Read the article: Propensity Score Matching