Flow-based Generative Modeling of Potential Outcomes and Counterfactuals

arXiv:2505.16051v3 Announce Type: replace
Abstract: Predicting potential and counterfactual outcomes from observational data is central to individualized decision-making, particularly in clinical settings where treatment choices must be tailored to each patient rather than guided solely by population averages. We propose PO-Flow, a continuous normalizing flow (CNF) framework for causal inference that jointly models potential outcome distributions and factual-conditioned counterfactual outcomes. Trained via flow matching, PO-Flow provides a unified approach to individualized potential outcome prediction, conditional average treatment effect estimation, and counterfactual prediction. By encoding an observed factual outcome into a shared latent representation and decoding it under an alternative treatment, PO-Flow relates factual and counterfactual realizations at the individual level, rather than generating counterfactuals independently from marginal conditional distributions. In addition, PO-Flow supports likelihood-based evaluation of potential outcomes, enabling uncertainty-aware assessment of predictions. A supporting recovery guarantee is established under certain assumptions, and empirical results on benchmark datasets demonstrate strong performance across a range of causal inference tasks within the potential outcomes framework.