@TechReport{iza:izadps:dp354, author={Kluve, Jochen}, title={On the Role of Counterfactuals in Inferring Causal Effects of Treatments}, year={2001}, month={Sep}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={354}, url={https://www.iza.org/index.php/publications/dp354}, abstract={Causal inference in the empirical sciences is based on counterfactuals. This paper presents the counterfactual account of causation in terms of Lewis’s possible-world semantics, and reformulates the statistical potential outcome framework and its underlying assumptions using counterfactual conditionals. I discuss varieties of causally meaningful counterfactuals for the case of a finite number of treatments, and illustrate these using a simple set-theoretical framework. The paper proceeds to examine proximity relations between possible worlds, and discusses implications for empirical practice.}, keywords={treatment effect;possible worlds;counterfactuals;Causation}, }