Propensity Score Propagation: A General Framework for Design-Based Inference with Unknown Propensity Scores

Abstract: Design-based inference, also known as randomization-based or finite-population inference, provides a principled framework for causal and descriptive analyses that attribute randomness solely to the design mechanism (e.g., treatment assignment, sampling, or missingness) without imposing distributional or modeling assumptions on the outcome data of study units. Despite its conceptual appeal and long history, this framework becomes challenging to apply when the underlying design probabilities (i.e., propensity scores) are unknown, as is common in observational studies, real-world surveys, and missing-data settings. Existing plug-in or matching-based approaches either ignore the uncertainty stemming from estimated propensity scores or rely on the post-matching uniform-propensity condition (an assumption typically violated when there are multiple or continuous covariates), leading to systematic under-coverage. Finite-population M-estimation partially mitigates these issues but remains limited to parametric propensity score models. In this work, we introduce propensity score propagation, a general framework for valid design-based inference with unknown propensity scores. The framework introduces a regeneration-and-union procedure that automatically propagates uncertainty in propensity score estimation into downstream design-based inference. It accommodates both parametric and nonparametric propensity score models, integrates seamlessly with standard tools in design-based inference with known propensity scores, and is universally applicable to various important design-based inference problems, such as observational studies, real-world surveys, and missing-data analyses, among many others. Simulation studies demonstrate that the proposed framework restores nominal coverage levels in settings where conventional methods suffer from severe under-coverage.