A Differential Effect Approach to Partial Identification of Treatment Effects

Abstract: We consider identification and inference for the average treatment effect and heterogeneous treatment effect conditional on observable covariates in the presence of unmeasured confounding. Since point identification of these treatment effects is not achievable without strong assumptions, we obtain bounds on these treatment effects by leveraging differential effects, a tool that allows for using a second treatment to learn the effect of the first treatment. The differential effect is the effect of using one treatment in lieu of the other. We provide conditions under which differential treatment effects can be used to point identify or partially identify treatment effects. Under these conditions, we develop a flexible and easy-to-implement semi-parametric framework to estimate bounds and leverage a two-stage approach to conduct statistical inference on effects of interest. The proposed method is examined through a simulation study and a case study that investigates the effect of smoking on the blood level of cadmium using the National Health and Nutrition Examination Survey.