Correlation and Causation

Events that coincide with each other are not necessarily caused by each other. Consider for instance:

  • Pure coincidence: Singapore economy highly correlated with population of rabbits in Australia.
  • Direct causation: Smoking causes lung cancer.
  • Reverse causation: Number of firemen fighting a fire correlates with the size of the fire. It would be incorrect to conclude that firemen cause fire to spread. Similarly, it would be incorrect to conclude that using a wheelchair is dangerous, because a high proportion of people who use them have had an accident.
  • Bi-directional or cyclic causation (A causes B and B causes A): Predator numbers affect prey numbers, but prey numbers, i.e., food supply, also affect predator numbers.
    Cyclic causation is often seen in the economy. For instance, people tend to spend less and save more when the economy is weak, causing the economy to decline further.
  • Third factor (the common-causal variable) causes both A and B. Spike in sales of soft drinks correlates with incidence of beach drowning deaths. Drinking soft drinks is not causing the drowning deaths. A third factor, hot weather is causing people to consume more soft drinks, and it also the reason why more people are going to beaches to swim.
Previous     Next

Use the Search Bar to find content on MarketingMind.







Marketing Analytics Workshop

Marketing Analytics Workshop

In an analytics-driven business environment, this analytics-centred consumer marketing workshop is tailored to the needs of consumer analysts, marketing researchers, brand managers, category managers and seasoned marketing and retailing professionals.


What they SHOULD TEACH at Business Schools

What they SHOULD TEACH at Business Schools


Is marketing education fluffy too?


Experiential Learning via Simulators | Best Way to Train Marketers

Experiential Learning via Simulators | Best Way to Train Marketers


Marketing simulators impart much needed combat experiences, equipping practitioners with the skills to succeed in the consumer market battleground. They combine theory with practice, linking the classroom with the consumer marketplace.