Treatment Effect Estimation for Optimal Decision-Making

Decision-making in various fields, such as medicine, is heavily based on conditional average treatment effects (CATEs). Practitioners commonly make decisions by checking whether the estimated CATE is positive, even though the decision-making performance of modern CATE estimators (meta-learners) is poorly understood. In this paper, we study optimal decision-making based on two-stage meta-learners (e.g., DR-learner), which estimate CATE via a second-stage regression. We show that these meta-learners can be suboptimal when used for decision-making in common settings where the second-stage regression is over a restricted function class (e.g., when using regularization or employing fairness/interpretability constraints). Intuitively, this occurs because such estimators prioritize CATE accuracy in regions far away from the decision boundary, which is ultimately irrelevant to decision-making. As a remedy, we propose a novel two-stage learning objective that re-targets the CATE to balance CATE estimation error and decision performance. We then propose a neural method that optimizes an adaptively-smoothed approximation of our learning objective. Finally, we confirm the effectiveness of our method both empirically and theoretically.