Uncertain Neighbors: Bayesian Propensity Score Matching For Causal Inference

Abstract: We compare the performance of standard nearest-neighbor propensity score matching with that of an analogous Bayesian propensity score matching procedure. We show that the Bayesian approach makes better use of available information, as it makes less arbitrary decisions about which observations to drop and which ones to keep in the matched sample. We conduct a simulation study to evaluate the performance of standard and Bayesian nearest-neighbor matching when matching is done with and without replacement. We then use both methods to replicate a recent study about the impact of land reform on guerrilla activity in Colombia.