alexa Weighting regressions by propensity scores.
Business & Management

Business & Management

Journal of Stock & Forex Trading

Author(s): Freedman DA, Berk RA

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Abstract Regressions can be weighted by propensity scores in order to reduce bias. However, weighting is likely to increase random error in the estimates, and to bias the estimated standard errors downward, even when selection mechanisms are well understood. Moreover, in some cases, weighting will increase the bias in estimated causal parameters. If investigators have a good causal model, it seems better just to fit the model without weights. If the causal model is improperly specified, there can be significant problems in retrieving the situation by weighting, although weighting may help under some circumstances. This article was published in Eval Rev and referenced in Journal of Stock & Forex Trading

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