Quantitative Economics

Journal of the Econometric Society

Edited by: Bernard Salanié • Print ISSN: 1759-7323 • Online ISSN: 1759-7331

Quantitative Economics: Jan, 2026, Volume 17, Issue 1

The Local Approach to Causal Inference under Network Interference

https://doi.org/10.3982/QE2484
p. 173-199

Eric Auerbach|Hongchang Guo|Max Tabord‐Meehan

We propose a new nonparametric modeling framework for causal inference when outcomes depend on how agents are linked in a social or economic network. Such network interference describes a large literature on treatment spillovers, social interactions, social learning, information diffusion, disease and financial contagion, social capital formation, and more. Our approach works by first characterizing how an agent is linked in the network using the configuration of other agents and connections nearby as measured by path distance. The impact of a policy or treatment assignment is then learned by pooling outcome data across similarly configured agents. We demonstrate the approach by deriving finite‐sample bounds on the mean‐squared error of a k‐nearest neighbor estimator for the average treatment response as well as proposing an asymptotically valid test for the hypothesis of policy irrelevance. We illustrate the empirical applicability of our method with simulations and an application to social capital formation.


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Supplemental Material

Supplement to "The Local Approach to Causal Inference under Network Interference"

Eric Auerbach, Hongchang Guo, and Max Tabord-Meehan

This supplement contains material not found within the manuscript.

Supplement to "The Local Approach to Causal Inference under Network Interference"

Eric Auerbach, Hongchang Guo, and Max Tabord-Meehan

The replication package for this paper is available at https://doi.org/10.5281/zenodo.17552893. The Journal checked the data and codes included in the package for their ability to reproduce the results in the paper and approved online appendices. Given the highly demanding nature of the algorithms, the reproducibility checks were run on a simplified version of the code, which is also available in the replication package.