Causal Inference Using Propensity Score Matching in Clustered Data

Abstract: Propensity score matching is commonly used to estimate causal effects of treatments. However, when using data with a hierarchical structure, we need to take the multilevel nature of the data into account. In this thesis the estimation of propensity scores with multilevel models is presented to extend propensity score matching for use with multilevel data. A Monte Carlo simulation study is performed to evaluate several different estimators. It is shown that propensity score estimators ignoring the multilevel structure of the data are biased, while fixed effects models produce unbiased results. An empirical study of the causal effect of truancy on mathematical ability for Swedish 9th graders is also performed, where it is shown that truancy has a negative effect on mathematical ability.