There’s an aged asserting that goes, “figures save no longer lie, but liars can figure.” However most steadily even the figures can sprint a confusing memoir. That’s why I’ve constantly liked the energy of working out statistics. I even be aware encouraging my sons to opt a statistics class over a calculus route because, unlike calculus, I’ve aged statistics practically day by day, but I have not aged calculus since I fortunately departed differential equations class in college.
Many organizations drop in a frequent major error referring to inspecting and attributing their very luxuriate in successes and disasters. They confuse correlation with causation.
Correlation Versus Causation
Let’s open by defining our phrases. Correlation is when two objects are linked one scheme or the opposite statistically. In other phrases, we are in a position to exercise stats to prove that these two issues are linked in conjunction with a excessive fee of chance.
To illustrate that after I luxuriate in too powerful pizza, I feel effort in my belly. The movement of eating quite quite loads of pizza may maybe be very correlated with me feeling sick.
While these two actions are correlated, they save no longer basically mean that the predominant movement precipitated the second. What if, as an example, it grew to changed into out that I had Celiac illness–which is an hypersensitivity to wheat. On this case, which system that or no longer it is since the pizza crust became as soon as made with wheat which precipitated my illness–no longer that I ate too powerful.
The Correlation Trap
A extra traditional example of how or no longer it is easy to confuse correlation with causation is that we are in a position to statistically prove that 97% of individuals that bought proper into a car accident drank at the very least one glass of water 24 hours before the accident. There may maybe be bound mathematical proof that drinking a tumbler of water may maybe be very correlated with car accidents. However everyone knows there’s no causation to this ridiculous relationship.
While that example is bound, the equivalent mistake is made hundreds of cases a day in companies. Statistical analysis is performed between a component and an smash result, and a excessive level of correlation is came across. That is a case of confusing correlation with causation. This comes out when the experiment is scaled in step with these statistics and the smash result is just not truly generated. One thing else became as soon as inflicting the smash result, no longer the non-causal, but correlated insist.
Unlocking Causation
Thanks to the smartly-known thinker and author John Stuart Mill, who studied the connection between correlation and causation lend a hand in his , A Machine of Common sense Ratiocinative and Inductive (1843), there are three questions which that probabilities are you’ll maybe per chance question to search out out causality.
- Enact X and Y events happen together? Are they constantly going down together at the same time?
- X precedes Y. Does Y constantly happen after X has occurred?
- There are no longer any other reasonable explanations for the observed XY relationship.
If any of these three questions can’t be answered within the affirmative, then there’s no longer causation though there may maybe be likely to be correlation.
Correlation in Circulation
A huge example of how your group may maybe well maybe just be confusing correlation with causation is on this planet of digital marketing. You luxuriate in came across that you noticed an sizable bump in gross sales lately after you launched a recent Google advert or a recent reveal marketing initiative. There may maybe be clearly a correlation between these two events. However is there causation?
While you happen to peel lend a hand that onion, which that probabilities are you’ll rep that there luxuriate in been a host of environmental components that came into play–bask in post-Covid client place a question to, provide chain points, and lots others.–that had been the splendid drivers for place a question to on your merchandise. Sadly, none of these are controllable by the marketing crew, who would per chance be involved to amplify funds in step with the statistical correlation they came across between their actions and the elevated earnings.
I labored with a company that sold residence safety instruments and it became as soon as in fact savvy with its promoting. And at any time when the marketing department place out a recent advert, they said it drove gross sales. However over time, we noticed that it became as soon as one thing else entirely–bask in a news memoir a few revolt or a taking pictures–that led to the amplify in gross sales. The advert became as soon as most inviting a billboard that instructed individuals where to call or click to expose a system.
As soon as more, it can maybe just additionally be easy to keep credit or blame to one movement or match when one thing else became as soon as truly the motive force. That’s why, in that safety group, our mantra grew to changed into: correlation is just not any longer causation!
So, the subsequent time anyone gifts a statistical case to you, question your self Mill’s three questions to lend a hand drill down and ogle if there became as soon as in fact causation at work.
