A groupwise approach for inferring heterogeneous treatment effects in causal inference

Abstract Recently, there has been great interest in estimating the conditional average treatment effect using flexible machine learning methods. However, in practice, investigators often have working hypotheses about effect heterogeneity across pre-defined subgroups of study units, which we call the groupwise approach. The paper compares two modern ways to estimate groupwise treatment effects, a non-parametric approach and a semi-parametric approach, with the goal of better informing practice. Specifically, we compare (a) the underlying assumptions, (b) efficiency and adaption to the underlying data generating models, and (c) a way to combine the two approaches. We also discuss how to test a key assumption concerning the semi-parametric estimator and to obtain cluster-robust standard errors if study units in the same subgroups are correlated. We demonstrate our findings by conducting simulation studies and reanalysing the Early Childhood Longitudinal Study.