From the course: Economic Tips for Everyone

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Correlation is not causation

Correlation is not causation

From the course: Economic Tips for Everyone

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Correlation is not causation

- Did you know that data shows there's a correlation between ice cream consumption and murder? That doesn't mean that consuming ice cream leads to murder, and it illustrates an important point, that there's a difference between correlation and causation. A correlation exists when there's a statistical relationship between two different data series, like ice cream sales went up at the same time murders went up. That's a correlation. The data may move at the same time, but they could be completely unrelated. A causation is when there's a causal relationship between the two different data series, like how much you water a plant and how much that plant grows. That data's likely to be correlated, and the water likely causes the plant to grow. Sometimes correlations are just correlations, but sometimes there is a causal relationship, and one thing causes another to happen. Making sure that you know the difference whenever…

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