Causal Post-Processing of Predictive Models
This addresses the challenge for organizations in making effective and scalable intervention decisions, such as in marketing or healthcare, by bridging predictive modeling with causal inference, though it is incremental as it builds on existing methods.
The paper tackles the problem that predictive models often misguide intervention decisions because they predict outcomes rather than causal effects, proposing causal post-processing (CPP) to refine model outputs using limited experimental data, with results showing improved decisions in simulations and digital advertising.
Organizations increasingly rely on predictive models to decide who should be targeted for interventions, such as marketing campaigns, customer retention offers, or medical treatments. Yet these models are usually built to predict outcomes (e.g., likelihood of purchase or churn), not the actual impact of an intervention. As a result, the scores (predicted values) they produce are often imperfect guides for allocating resources. Causal effects can be estimated with randomized experiments, but experiments are costly, limited in scale, and tied to specific actions. We propose causal post-processing (CPP), a family of techniques that uses limited experimental data to refine the outputs of predictive models, so they better align with causal decision making. The CPP family spans approaches that trade off flexibility against data efficiency, unifying existing methods and motivating new ones. Through simulations and an empirical study in digital advertising, we show that CPP can improve intervention decisions, particularly when predictive models capture a useful but imperfect causal signal. Our results show how organizations can combine predictive modeling with experimental evidence to make more effective and scalable intervention decisions.