Nonparametric structural equation model Created 2026-09-24 Updated 2026-11-05
A nonparametric structural equation model assigns each observed variable an arbitrary measurable function of its graphical parents and an exogenous variable. Independence or dependence among exogenous variables determines the graph's latent-confounding structure.
A nonparametric structural equation model for the graph can be written
The bidirected edge permits dependence between and ; apart from this pair the exogenous variables are mutually independent. The basic potential outcomes are
and the natural nested outcome is .
The exogenous independences imply that the whole family is independent of , while is independent of and the basic response potentials. The bidirected edge means that and need not be independent. Useful observed-counterfactual consequences include