Heterogeneous Treatment and Spillover Effects under Clustered Network Interference

TL;DR

This paper introduces a machine learning method called Network Causal Tree (NCT) that estimates heterogeneous treatment and spillover effects in clustered networks with interference, aiding policy design.

Contribution

The paper develops the NCT algorithm that accounts for network interference to assess heterogeneity in treatment and spillover effects using tree-based models.

Findings

NCT effectively captures treatment heterogeneity in simulations.

Application to rural China shows policy implications.

Method outperforms traditional approaches in presence of interference.

Abstract

The bulk of causal inference studies rule out the presence of interference between units. However, in many real-world scenarios, units are interconnected by social, physical, or virtual ties, and the effect of the treatment can spill from one unit to other connected individuals in the network. In this paper, we develop a machine learning method that uses tree-based algorithms and a Horvitz-Thompson estimator to assess the heterogeneity of treatment and spillover effects with respect to individual, neighborhood, and network characteristics in the context of clustered networks and neighborhood interference within clusters. The proposed Network Causal Tree (NCT) algorithm has several advantages. First, it allows the investigation of the treatment effect heterogeneity, avoiding potential bias due to the presence of interference. Second, understanding the heterogeneity of both treatment and spillover effects can guide policy-makers in scaling up interventions, designing targeting strategies, and increasing cost-effectiveness. We investigate the performance of our NCT method using a Monte Carlo simulation study, and we illustrate its application to assess the heterogeneous effects of information sessions on the uptake of a new weather insurance policy in rural China.