Abstract
Instrumental variable (IV) analysis is used to address unmeasured confounding when comparing two nonrandomized treatment groups. The local average treatment effect (LATE) is a causal estimand that can be identified by an IV. The LATE approach is appealing because its identification relies on weaker assumptions than those in other IV approaches requiring a homogeneous treatment effect assumption. If the instrument is confounded by some covariates, then one can use a weighting estimator, for which the outcome and treatment are weighted by instrumental propensity scores. The weighting estimator for the LATE has a large variance when the IV is weak and the target population, i.e., the compliers, is relatively small. We propose a truncated LATE that can be estimated more reliably than the regular LATE in the presence of a weak IV. In our approach, subjects who contribute substantially to the weak IV are identified by their probabilities of being compliers, and they are removed based on a pre-specified threshold. We discuss interpretation of the proposed estimand and related inference method. Simulation and real data experiments demonstrate that the proposed truncated LATE can be estimated more precisely than the standard LATE.
Highlights
Instrumental variable (IV) analysis can be used to address bias from unobserved confounding in non-randomized studies when estimating a treatment effect on an outcome of interest
Imbens and Angrist [8] introduced a causal estimand that can be identified by an IV called the local average treatment effect (LATE)
This approach requires the estimation of instrumental propensity scores (IPSs), which are analogous to propensity scores (PSs) for the probability of treatment, and the construction of an outcome model for compliers as a function of the treatment and covariates, which is called the local average response function
Summary
Data Availability Statement: The data set for the PRI.DE study is available from the nonrandom R package. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. There was no additional external funding received for this study
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