Forecasted Treatment Effects

54 Pages Posted: 1 Sep 2023

See all articles by Irene Botosaru

Irene Botosaru

Simon Fraser university

Raffaella Giacomini

University College London - Department of Economics; University of California, Los Angeles - Department of Economics

Martin Weidner

University of Oxford

Date Written: August 31, 2023


We consider estimation and inference about the effects of a policy in the absence of a control group. We obtain unbiased estimators of individual (heterogeneous) treatment effects and a consistent and asymptotically normal estimator of the average treatment effects, based on forecasting counterfactuals using a short time series of pre-treatment data. We show that the focus should be on forecast unbiasedness rather than accuracy. Correct specification of the forecasting model is not necessary to obtain unbiased estimates of the individual treatment effects. Instead, simple basis function (e.g., polynomial time trends) regressions deliver unbiasedness under a broad class of data-generating processes for the individual counterfactuals. Basing the forecasts on a model can introduce misspecification bias and does not necessarily improve performance even under correct specification. Consistency and asymptotic normality of the Forecasted Average Treatment effects (FAT) estimator attains under an additional assumption that rules out common and unforecastable shocks occurring between the treatment date and the date at which the effect is calculated.

Keywords: Polynomial regressions; Forecast unbiasedness; Counterfactuals; Misspecification; Heterogeneous treatment effects

JEL Classification: C32, C53

Suggested Citation

Botosaru, Irene and Giacomini, Raffaella and Weidner, Martin, Forecasted Treatment Effects (August 31, 2023). FRB of Chicago Working Paper No. 2023-32, Available at SSRN: or

Irene Botosaru

Simon Fraser university ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6

Raffaella Giacomini (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

University of California, Los Angeles - Department of Economics ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095-1361
United States

Martin Weidner

University of Oxford ( email )

10 Manor Rd
Oxford, OX1 3UQ
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics