De-confounding causal inference using latent multiple-mediator pathways

Abstract: Causal effect estimation from observational data is one of the essential problems in causal inference. However, most estimation methods rely on the strong assumption that all confounders are observed, which is impractical and untestable in the real world. We develop a mediation analysis framework inferring the latent confounder for debiasing both direct and indirect causal effects. Specifically, we introduce generalized structural equation modeling that incorporates structured latent factors to improve the goodness-of-fit of the model to observed data, and deconfound the mediators and outcome simultaneously. One major advantage of the proposed framework is that it utilizes the causal pathway structure from cause to outcome via multiple mediators to debias the causal effect without requiring external information on latent confounders. In addition, the proposed framework is flexible in terms of integrating powerful nonparametric prediction algorithms while retaining interpretable mediation effects. In theory, we establish the identification of both causal and mediation effects based on the proposed deconfounding method. Numerical experiments on both simulation settings and a normative aging study indicate that the proposed approach reduces the estimation bias of both causal and mediation effects.