Addressing confounding errors when using non-experimental, observational data to make causal claims

In their recent book, Is Inequality Bad for Our Health?, Daniels, Kennedy, and Kawachi claim that to "act justly in health policy, we must have knowledge about the causal pathways through which socioeconomic (and other) inequalities work to produce differential health outcomes." One of the central problems with this approach is its dependency on "knowledge about the causal pathways." A widely held belief is that the randomized clinical trial (RCT) is, and ought to be the "gold standard" of evaluating the causal efficacy of interventions. However, often the only data available are non-experimental, observational data. For such data, the necessary randomization is missing. Because the randomization is missing, it seems to follow that it is not possible to make epistemically warranted claims about the causal pathways. Although we are not sanguine about the difficulty in using observational data to make warranted causal claims, we are not as pessimistic as those who believe that the only warranted causal claims are claims based on data from (idealized) RCTs. We argue that careful, thoughtful study design, informed by expert knowledge, that incorporates propensity score matching methods in conjunction with instrumental variable analyses, provides the possibility of warranted causal claims using observational data.