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An Introduction to Double/Debiased Machine Learning

Published: April 11, 2025 | arXiv ID: 2504.08324v1

By: Achim Ahrens , Victor Chernozhukov , Christian Hansen and more

Potential Business Impact:

Makes computer predictions more accurate and fair.

Business Areas:
Predictive Analytics Artificial Intelligence, Data and Analytics, Software

This paper provides a practical introduction to Double/Debiased Machine Learning (DML). DML provides a general approach to performing inference about a target parameter in the presence of nuisance parameters. The aim of DML is to reduce the impact of nuisance parameter estimation on estimators of the parameter of interest. We describe DML and its two essential components: Neyman orthogonality and cross-fitting. We highlight that DML reduces functional form dependence and accommodates the use of complex data types, such as text data. We illustrate its application through three empirical examples that demonstrate DML's applicability in cross-sectional and panel settings.

Page Count
53 pages

Category
Economics:
Econometrics