Inverse probability weighting (IPW)
In this section, we’ll discuss IPW. We’ll see how IPW can be used to de-bias our causal estimates, and we’ll implement it using DoWhy.
Many faces of propensity scores
Although propensity scores might not be the best choice for matching, they still might be useful in other contexts. IPW is a method that allows us to control for confounding by creating so-called pseudo-populations within our data. Pseudo-populations are created by upweighting the underrepresented and downweighting the overrepresented groups in our dataset.
Imagine that we want to estimate the effect of drug D. If males and females react differently to D and we have 2 males and 6 females in the treatment group and 12 males and 2 females in the control group, we might end up with a situation similar to the one that we’ve seen in Chapter 1: the drug is good for everyone, but is harmful to females and males!
This is Simpson’s paradox at its...