Balancing External vs. Internal Validity: An Application of Causal Forest in Finance
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DOI: 10.1287/mnsc.2023.00109
Abstract: Answering causal questions with generalizable results is challenging. Estimators requiring pseudorandomization provide estimates with no bias (i.e., strong internal validity) but limited generalizability (i.e., weak external validity). Theoretically, causal forest, a nonparametric, machine learning–based matching… read more here.
Keywords: finance; causal forest; internal validity; balancing external ... See more keywords