Causal Inference for Spatial Treatments

Abstract

Many events and policies (treatments) occur at specific spatial locations, with researchers interested in their effects on nearby units. I approach the spatial treatment setting from an experimental perspective: What ideal experiment would we design to estimate the causal effects of spatial treatments? This perspective motivates a comparison between units near realized treatment locations and units near counterfactual (unrealized) candidate locations, which differs from current empirical practice. I derive design-based standard errors that are straightforward to compute. For observational data, I propose machine learning methods to find counterfactual candidate locations when observable characteristics, rather than potential outcomes, determine treatment probabilities. To accommodate methods for high-dimensional data in the theory, I extend a double machine learning result to the design-based framework with spatial correlations. I apply the proposed methods to study the causal effects of grocery stores on foot traffic to nearby businesses during COVID-19 shelter-in-place policies, finding a large positive effect at very short distances, with no effect at larger distances.