Demystifying Prediction Powered Inference

TL;DR

This paper clarifies Prediction-Powered Inference (PPI), a framework that uses machine learning predictions to enhance statistical inference from large unlabeled datasets, while addressing biases and providing practical guidelines for responsible application.

Contribution

It synthesizes PPI's theoretical foundations, methodological extensions, and diagnostic tools into a unified workflow, aiding practitioners in responsible and effective use of PPI methods.

Findings

PPI variants yield tighter confidence intervals than complete-case analysis.

Reusing training data can lead to anti-conservative confidence intervals.

All methods are biased under missing-not-at-random mechanisms.

Abstract

Machine learning predictions are increasingly used to supplement incomplete or costly-to-measure outcomes in fields such as biomedical research, environmental science, and social science. However, treating predictions as ground truth introduces bias while ignoring them wastes valuable information. Prediction-Powered Inference (PPI) offers a principled framework that leverages predictions from large unlabeled datasets to improve statistical efficiency while maintaining valid inference through explicit bias correction using a smaller labeled subset. Despite its potential, the growing PPI variants and the subtle distinctions between them have made it challenging for practitioners to determine when and how to apply these methods responsibly. This paper demystifies PPI by synthesizing its theoretical foundations, methodological extensions, connections to existing statistics literature, and diagnostic tools into a unified practical workflow. Using the Mosaiks housing price data, we show that PPI variants produce tighter confidence intervals than complete-case analysis, but that double-dipping, i.e. reusing training data for inference, leads to anti-conservative confidence intervals and coverages. Under missing-not-at-random mechanisms, all methods, including classical inference using only labeled data, yield biased estimates. We provide a decision flowchart linking assumption violations to appropriate PPI variants, a summary table of selective methods, and practical diagnostic strategies for evaluating core assumptions. By framing PPI as a general recipe rather than a single estimator, this work bridges methodological innovation and applied practice, helping researchers responsibly integrate predictions into valid inference.