Improving the Power of the Randomization Test
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We consider the problem of evaluating designs for a two-arm randomized experiment with the criterion being the power of the randomization test for the one-sided null hypothesis. Our evaluation assumes a response that is linear in one observed covariate, an unobserved component and an additive treatment effect where the only randomness comes from the treatment allocations. It is well-known that the power depends on the allocations' imbalance in the observed covariate and this is the reason for the classic restricted designs such as rerandomization. We show that power is also affected by two other design choices: the number of allocations in the design and the degree of linear dependence among the allocations. We prove that the more allocations, the higher the power and the lower the variability in the power. Designs that feature greater independence of allocations are also shown to have higher performance. Our theoretical findings and extensive simulation studies imply that the designs with the highest power provide thousands of highly independent allocations that each provide nominal imbalance in the observed covariates. These high powered designs exhibit less randomization than complete randomization and more randomization than recently proposed designs based on numerical optimization. Model choices for a practicing experimenter are rerandomization and greedy pair switching, where both outperform complete randomization and numerical optimization. The tradeoff we find also provides a means to specify the imbalance threshold parameter when rerandomizing.
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