Parametric and nonparametric propensity score weighting analysis with subgroup covariate balance

Estimating the causal treatment effects by subgroups is important in observational studies when the treatment effect heterogeneity is present. Existing propensity score methods rely on a correctly specified propensity score model. Model misspecification results in biased treatment effect estimation and covariate imbalance. We proposed a method for the propensity score analysis with controlled subgroup balance (G-SBPS) to achieve covariate mean balance in all subgroups. We further incorporated nonparametric kernel regression for the propensity scores and developed a kernelized G-SBPS (kG-SBPS) to improve the subgroup mean balance of covariate transformations in a rich functional class. This extension increased robustness to propensity score model misspecification. Extensive numerical studies showed that G-SBPS and kG-SBPS improve both subgroup covariate balance and subgroup treatment effect estimation, compared to existing approaches. For illustration, we applied G-SBPS and kG-SBPS to a dataset on right heart catheterization to estimate the subgroup average treatment effects on the hospital length of stay and a dataset on diabetes self-management training to estimate the subgroup average treatment effects for the treated on the hospitalization rate.