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643 | 643 | "\n", |
644 | 644 | "1. $T \\leftarrow Y_0 \\rightarrow Y_1$: this can be closed by observing $Y_0$. \n", |
645 | 645 | "2. $T \\leftarrow X \\rightarrow Y_1$: this can be closed by observing the covariates $\\mathbf{X}$.\n", |
646 | | - "3. $T \\leftarrow Y_0 \\leftarrow U_1 \\to Y_1$: this is a real danger to unbiased estimation.\n", |
647 | | - "4. $T \\leftarrow U_2 \\rightarrow Y_1$: this is another potential danger to unbiased estimation.\n", |
| 646 | + "3. $T \\leftarrow Y_0 \\leftarrow U_1 \\to Y_1$: this can be closed by observing $Y_0$.\n", |
| 647 | + "4. $T \\leftarrow U_2 \\rightarrow Y_1$: this is danger to unbiased estimation.\n", |
648 | 648 | "\n", |
649 | 649 | "By conditioning on both $Y_0$ and $X$ we intercept backdoor paths 1 and 2, satisfying Pearl's back-door criterion. The treatment coefficient in the ANCOVA formula therefore identifies the causal effect of interest under the model's other assumptions (no measurement error, correct functional form, etc.).\n", |
650 | 650 | "\n", |
651 | | - "If we can discount $U_1$ and $U_2$ then we can estimate the treatment effect $T \\to Y_1$ by running the linear regression:\n", |
| 651 | + "If we can discount $U_2$ then we can estimate the treatment effect $T \\to Y_1$ by running the linear regression:\n", |
652 | 652 | "\n", |
653 | 653 | "$$\n", |
654 | 654 | "Y_1 = \\alpha + \\tau\\,T + \\gamma\\,Y_0 + \\mathbf{X}\\boldsymbol\\beta + \\varepsilon ,\n", |
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708 | 708 | "If $\\tau$ was a scaler, then we simply have $\\text{ATE} = \\tau$. If $\\tau$ is instead a posterior distribution, then we can think of the posterior over $\\tau$ as the posterior over the ATE. In this way, the treatment coefficient $\\tau$ captures the ATE in the regression model.\n", |
709 | 709 | ":::\n", |
710 | 710 | "\n", |
711 | | - "However, if there are unobserved confounders $U_1$ or $U_2$, then these will pose real threats to unbiased estimation of the treatment effect $T \\to Y_1$." |
| 711 | + "However, if there is an unobserved confounder $U_2$, then this will pose a real threat to unbiased estimation of the treatment effect $T \\to Y_1$." |
712 | 712 | ] |
713 | 713 | }, |
714 | 714 | { |
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