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Understand Propensity Score Matching in Business Analytics

Walmart LabsData Scientist · Onsite
MediumData ScientistOnsiteStatistics & Math

Last updated

This interview question evaluates statistical assumptions, formulas, estimation strategy, uncertainty, edge cases, and interpretation in a realistic interview setting. A strong answer for Understand Propensity Score Matching in Business Analytics states assumptions, handles edge cases, explains trade-offs, and shows how to validate the result clearly.

Scenario

Interview for a data-science role on a growth analytics team that needs to estimate treatment effects from observational product data.

Question

What is Propensity Score Matching (PSM) and in which business situations would you apply it? 2) List the assumptions required for PSM to yield unbiased causal estimates. 3) How do you assess whether the matching achieved good covariate balance?

Hints

Discuss ignorability, common support, balance diagnostics, and potential limitations of PSM.