Language Models as Causal Effect Generators

In this work, we present sequence-driven structural causal models (SD-SCMs), a framework for specifying causal models with user-defined structure and language-model-defined mechanisms. We characterize how an SD-SCM enables sampling from observational, interventional, and counterfactual distributions according to the desired causal structure. We then leverage this procedure to propose a new type of benchmark for causal inference methods, generating individual-level counterfactual data to test treatment effect estimation. We create an example benchmark consisting of thousands of datasets, and test a suite of popular estimation methods for average, conditional average, and individual treatment effect estimation. We find under this benchmark that (1) causal methods outperform non-causal methods and that (2) even state-of-the-art methods struggle with individualized effect estimation, suggesting this benchmark captures some inherent difficulties in causal estimation. Apart from generating data, this same technique can underpin the auditing of language models for (un)desirable causal effects, such as misinformation or discrimination. We believe SD-SCMs can serve as a useful tool in any application that would benefit from sequential data with controllable causal structure.