AI engineering glossary · Statistics inference
What is instrumental variable?
Instrumental variable: A variable that affects the treatment but influences the outcome only through that treatment and is unrelated to hidden confounders. It allows causal estimation when direct comparison is contaminated. Finding a valid one is hard, and its assumptions cannot be fully tested from data.
Instrumental variable: an example
Using a random nudge email that changes whether users adopt a feature to estimate the feature's effect on retention.
Related terms
More Statistics inference terms
- Interaction term
- Jackknife
- Kolmogorov-Smirnov test
- Likelihood function
- Likelihood ratio test
- Log-likelihood
- Mann-Whitney U test
- Margin of error
Where you learn it
Instrumental variable is part of the AI Engineering Program, which teaches it with notes, a hands-on lab and an exam. The first lesson is free.