Pragmatic DML with AI-Learned Representations
Andres Aradillas Fernandez, Victor Chernozhukov, Carlos Cinelli, Sven Klaassen, Whitney Newey, Martin Spindler, Jan Teichert-Kluge, Suhas Vijaykumar
Abstract
Text, images, and other rich covariates are increasingly compressed into AI-learned representations and then used as controls in causal analysis. We study when this approach is valid and develop a practical framework for causal inference with learned representations. For a broad class of estimands, an imperfect representation distorts the target causal parameter by the product of two representation errors: one in the outcome regression and one in the balancing weight (or Riesz representer). This yields three constructive results. First, cross-fitted double machine learning (DML) provides valid Wald inference for the representation-dependent target. When representation errors are small, the same interval covers the causal parameter, and it can even attain the semiparametric efficiency bound. Second, fold-wise representation learning (or fine-tuning) is compatible with DML inference for the causal parameter. To this end, we develop convex- and star-aggregation pipelines for learning and combining representations. Third, when representation errors are substantial, we can provide interpretable sensitivity regions and root-n inference for their endpoints. In a multi-modal demand application, seven representation-specific estimates and their star aggregate all imply a negative near-unit elasticity for rank-based price response, and the result remains robust over the reported sensitivity grid.
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