LaLonde (1986) after Nearly Four Decades: Lessons Learned (Guido Imbens, Yiqing Xu)

“We show that modern methods, when applied in contexts with significant covariate overlap, yield robust estimates for the adjusted differences between the treatment and control groups. However, this does not mean that these estimates are valid. To assess their credibility, validation exercises (such as placebo tests) are essential, whereas goodness of fit tests alone are inadequate. Our findings highlight the importance of closely examining the assignment process, carefully inspecting overlap, and conducting validation exercises when analyzing causal effects with nonexperimental data.”

arXiv:2406.00827