Abstract: When assignment to treatment group is made solely on the basis of the value of a covariate, X, effort should be concentrated on estimating the conditional expectations of the dependent variable Y given X in the treatment and control groups. One then averages the difference between these conditional expectations over the distribution of X in the relevant population. There is no need for concern about “other” sources of bias, e.g., unreliability of X, unmeasured background variables. If the conditional expectations are parallel and linear, the proper regression adjustment is the simple covariance adjustment. However, since the quality of the resulting estimates may be sensitive to the adequacy of the underlying model, it is wise to search for nonparallelism and nonlinearity in these conditional expectations. Blocking on the values of X is also appropriate, although the quality of the resulting estimates may be sensitive to the coarseness of the blocking employed. In order for these techniques to be useful in practice, there must be either substantial overlap in the distribution of X in the treatment groups or strong prior information.

INTRODUCTION

In some studies, the experimental units are divided into two treatment groups solely on the basis of a covariate, X. By this we mean that if two units have the same value of X either they both must receive the same treatment or they must be randomly assigned (not necessarily with probability 0.5) to treatments.