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Keywords:

  • causal inference;
  • ignorability;
  • multilevel models;
  • neighborhood effects;
  • potential outcomes

Abstract

Two central assumptions concerning causal inference in the potential outcomes framework for estimating neighborhood effects are examined. The stable unit treatment value assumption in the context of neighborhood effects requires that an individual's outcome does not depend on the treatment assigned to neighborhoods other than the individual's own neighborhood. The assumption is important in that it makes estimation feasible, although some progress can be made even when the assumption is relaxed. Some discussion is given concerning the contexts in which the neighborhood-level stable unit treatment value assumption is likely to hold. The ignorability assumption allows the researcher to move from conclusions about association to conclusions about causation. In the context of neighborhood-wide interventions, the ignorability assumption for the individual-level potential outcomes framework can be easily adapted for neighborhood effects. Copyright © 2007 John Wiley & Sons, Ltd.