Causal Inference Under Approximate Neighborhood Interference

37 Pages Posted: 14 Nov 2019 Last revised: 25 Nov 2020

See all articles by Michael P. Leung

Michael P. Leung

University of Southern California - Department of Economics

Date Written: November 3, 2019

Abstract

This paper studies causal inference in randomized experiments under network interference. Commonly used models of interference posit that treatments assigned to alters beyond a certain network distance from the ego have no effect on the ego's response. However, this assumption is violated in many models of social interactions. We propose a substantially weaker model of "approximate neighborhood interference" (ANI) under which treatments assigned to alters further from the ego have smaller, but potentially nonzero, effects on the ego's response. For well-known models of social interactions, we can formally verify that ANI holds. We also prove that, under ANI and restrictions on the network topology, standard inverse-probability weighting estimators consistently estimate useful exposure effects and are asymptotically normal under asymptotics taking the network size large. For inference, we consider a network HAC variance estimator. Under a finite population model, we show that the estimator is biased but that the bias can be interpreted as the variance of unit-level exposure effects. This generalizes Neyman's well-known result on conservative variance estimation to settings with interference.

Keywords: social networks, causal inference, network interference

JEL Classification: C22, C31, C57

Suggested Citation

Leung, Michael, Causal Inference Under Approximate Neighborhood Interference (November 3, 2019). Available at SSRN: https://ssrn.com/abstract=3479902 or http://dx.doi.org/10.2139/ssrn.3479902

Michael Leung (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave.
Kaprielian (KAP) Hall, 310A
Los Angeles, CA 90089
United States

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