Navigating the Relationship: Exploring Correlation and Causation

“Correlation isn’t causation, but it sure is a hint.”

Edward Tufte

Hey, it’s Jerry Garrett, back with another MBA topic this week. Let’s dive into correlation and causation. First up, causation. Let me paint you a picture to make it easier to grasp.

Imagine you’re sick, take medicine, and voilà, you’re healed. That’s causation – the medicine caused your recovery. But now picture eating ice cream and catching a cold. Did the ice cream cause the cold? Not necessarily; maybe winter is coming.

Consider this: people who have heart attacks usually take about 365 showers a year. Do showers cause heart attacks? No, they don’t; it’s just a relation that could happen. Correlation doesn’t mean causation. A high association between two things doesn’t prove one causes the other.

Here’s another scenario: you own a burger joint or pizza place, air an ad on TV, and see a 40% increase in sales. Did the ad cause it? Again, not necessarily. Maybe there was an event nearby or an end-of-school-year celebration. Perhaps a newspaper promotion lured them in. Many factors could be at play.

Causation is tougher to prove than correlation, but we often mistake correlation for causation without realizing it. The more changes you can isolate from other factors, the more confident you can be when intentionally observing results.

Read the original one from Josh Kaufman here:

That wraps it up for this post. See you next week! Bye!

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