Open Access
May 2006 Estimating the Causal Effects of Marketing Interventions Using Propensity Score Methodology
Donald B. Rubin, Richard P. Waterman
Statist. Sci. 21(2): 206-222 (May 2006). DOI: 10.1214/088342306000000259


Propensity score methods were proposed by Rosenbaum and Rubin [Biometrika 70 (1983) 41–55] as central tools to help assess the causal effects of interventions. Since their introduction more than two decades ago, they have found wide application in a variety of areas, including medical research, economics, epidemiology and education, especially in those situations where randomized experiments are either difficult to perform, or raise ethical questions, or would require extensive delays before answers could be obtained. In the past few years, the number of published applications using propensity score methods to evaluate medical and epidemiological interventions has increased dramatically. Nevertheless, thus far, we believe that there have been few applications of propensity score methods to evaluate marketing interventions (e.g., advertising, promotions), where the tradition is to use generally inappropriate techniques, which focus on the prediction of an outcome from background characteristics and an indicator for the intervention using statistical tools such as least-squares regression, data mining, and so on. With these techniques, an estimated parameter in the model is used to estimate some global “causal” effect. This practice can generate grossly incorrect answers that can be self-perpetuating: polishing the Ferraris rather than the Jeeps “causes” them to continue to win more races than the Jeeps visiting the high-prescribing doctors rather than the low-prescribing doctors “causes” them to continue to write more prescriptions. This presentation will take “causality” seriously, not just as a casual concept implying some predictive association in a data set, and will illustrate why propensity score methods are generally superior in practice to the standard predictive approaches for estimating causal effects.


Download Citation

Donald B. Rubin. Richard P. Waterman. "Estimating the Causal Effects of Marketing Interventions Using Propensity Score Methodology." Statist. Sci. 21 (2) 206 - 222, May 2006.


Published: May 2006
First available in Project Euclid: 7 August 2006

zbMATH: 05191861
MathSciNet: MR2324079
Digital Object Identifier: 10.1214/088342306000000259

Keywords: marketing research , nonrandomized study , observational study , pharmaceutical detailing , promotion response , return on investment , Rubin Causal Model

Rights: Copyright © 2006 Institute of Mathematical Statistics

Vol.21 • No. 2 • May 2006
Back to Top