An Introduction to Causal Inference

DSA ADS Course - 2021

Causal Inference, Directed Acyclic Graphs, Counterfactuals, D-separation, Do-calculus, Simpson’s Paradox, Structural Causal Model

Introduction to Causal Inference - Fabian Dablander

September, 2020

Abstract

Causal inference goes beyond prediction by modeling the outcome of interventions and formalizing counterfactual reasoning. Instead of restricting causal conclusions to experiments, causal inference explicates the conditions under which it is possible to draw causal conclusions even from observational data. In this paper, I provide a concise introduction to the graphical approach to causal inference, which uses Directed Acyclic Graphs (DAGs) to visualize, and Structural Causal Models (SCMs) to relate probabilistic and causal relationships. Successively, we climb what Judea Pearl calls the “causal hierarchy” — moving from association to intervention to counterfactuals. I explain how DAGs can help us reason about associations between variables as well as interventions; how the do-calculus leads to a satisfactory definition of confounding, thereby clarifying, among other things, Simpson’s paradox; and how SCMs enable us to reason about what could have been. Lastly, I discuss a number of challenges in applying causal inference in practice.