Xinran Li : Randomization Inference beyond the Sharp Null: Bounded Null Hypotheses and Quantiles of Individual Treatment Effects

Posted by Min Yang , part of the Statistics and Data Science Seminar.

At

Sept. 16, 2020, 4 p.m.

In

636 SEO

Abstract

Randomization (a.k.a. permutation) inference is typically interpreted as testing Fisher's ``sharp'' null hypothesis that all effects are exactly zero. This hypothesis is often criticized as uninteresting and implausible. We show, however, that many randomization tests are also valid for a ``bounded'' null hypothesis under which effects are all negative (or positive) for all units but otherwise heterogeneous. The bounded null is closely related to important concepts such as monotonicity and Pareto efficiency. Inverting tests of this hypothesis yields confidence intervals for the maximum (or minimum) individual treatment effect. We then extend randomization tests to infer other quantiles of individual effects, which equivalently infers proportions of units with effects larger (or smaller) than any thresholds. The proposed confidence intervals for all quantiles of individual effects are simultaneously valid, in the sense that no correction due to multiple analyses is needed. In sum, we provide a broader justification for Fisher randomization tests, and develop exact nonparametric inference for quantiles of heterogeneous individual effects. The proposed methods move beyond usual constant effects under Fisher randomization tests and average effect in Neyman's repeated sampling inference. We illustrate our methods with simulations and applications, where we find that Stephenson rank statistics often provide the most informative results.