# Local Average Treatment Effect Estimation

By [deminf1.eth](https://paragraph.com/@deminf1) · 2024-04-16

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**Local Average Treatment Effect Estimation**
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When applying this method to our data, we see something like the following graph (which is for illustrative purposes only). On the x-axis, the graph shows the difference in cents between the customer’s order total and the threshold. The y-axis shows the rate of card declines. At the discontinuity, where the rounding suddenly jumps up to the next $5, we see the users on the right having significantly higher card decline rates than users on the left.

\*The plot is for illustrative purposes and does not reflect actual treatment effects or levels in the data.

We can of course repeat this analysis with other outcomes we may care about, such as unpaid amounts or re-authorization rates. Combining these estimates with a tradeoff framework helps inform us on whether we should be more or less aggressive in our authorization buffers.

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*Originally published on [deminf1.eth](https://paragraph.com/@deminf1/local-average-treatment-effect-estimation)*