Stable Causal Estimation with Optimal Transport

Abstract

In observational studies, the overlap assumption, also called positivity, is frequently strained in practice. Limited overlap destabilizes widely used estimators such as inverse propensity weighting (IPW), whose variance depends on density ratios that explode as propensity scores approach zero or one. To address this challenge, we propose the Stable Transport Estimator (STE), an optimal transport-based approach for estimating average causal effects when overlap holds but strict overlap fails. Unlike IPW, the variance of STE contains no density-ratio factor; it is governed by the transport map itself and stays finite under bounded moments, even when density ratios diverge. By replacing reweighting with a geometry-aware transport map, STE constructs stable counterfactual comparisons without requiring density estimation or propensity score modeling. STE further extends to settings where the overlap condition is violated: when covariate supports overlap only partially, a linear interpolation transport map enables principled extrapolation with explicit bias-variance trade-offs. We establish consistency, asymptotic normality, and a variance characterization that makes explicit the contribution of the estimated transport map to the asymptotic variance. Across synthetic and real datasets, STE demonstrates improved robustness, reduced bias, and markedly more stable variance compared to existing estimators.