Tuesday, April 14, 2009

Correlation & Causation

Correlation does not imply causation.  Look at that R squared in the top right corner.  Traffic deaths and lemon imports are almost perfectly correlated.  But neither causes the other.  This is a really common cognitive error, nobody is immune to it.  Humans like stories and patterns, they instinctively attribute relationships and process where none necessarily exist.  It is hard for us to accept that many things are random and unrelated.