1 / 53

Correlation and Causation Visiting Associate Professor Giddings

Correlation and Causation Visiting Associate Professor Giddings. Math/Econ 108. Outline. A Brief History of Correlation What is Causation? What is Correlation? Spurious Correlations Simpson’s Paradox How scientists determine causation. What is Causation?.

klaus
Download Presentation

Correlation and Causation Visiting Associate Professor Giddings

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Correlation and CausationVisiting Associate Professor Giddings Math/Econ 108

  2. Outline • A Brief History of Correlation • What is Causation? • What is Correlation? • Spurious Correlations • Simpson’s Paradox • How scientists determine causation

  3. What is Causation? • When changes in one variable (X) affect changes in another variable (Y), we say that X causes Y. • Examples: • The Sun Rises → Rooster Crows (unidirectional) • Education → Higher Wages (bidirectional?)

  4. Important Questions • What causes poverty? • Will Obama’s tax cuts cause the economy to expand? • Does immigration cause lower wages? • Does Prozac cause suicide? • Does the burning of fossil fuel cause global warming?

  5. The Importance of Causality • I would rather discover one causal law than be the King of Persia. • Democritus (460-370 B.C)

  6. How do we determine Causation? • Correlation • Controlled Experiments • Theory

  7. What is Correlation? • When two variables move together, we say they are correlated.

  8. Sir Francis Galton

  9. Sir Francis Galton

  10. Karl Pearson1857-1936 • Protégé of Sir Francis Galton, he founded the world’s first statistics department at University College London. • Main contributions: • Linear regression an dcorrelation • Classification of distributions • Pearson’s chi-square test • Coefficient of correlation

  11. Pearson’s r • Should be +1 if all points lie on line with a positive slope • Should be -1 if all points lie on line with a negative slope • Should be 0 if all points on horizontal or vertical line

  12. Should be unchanged if the same constant is added to all x-values or all y-values. Put center of graph at

  13. More Pearson’s

  14. Here’s a different way of seeing it • If r = 1, every X should equal Y. • So, Pearson’s correlation coefficient essentially measures how far the Xs and Ys are from each other.

  15. Examples

  16. So, the Crucial Point is… • Correlation does not necessarily imply causality

More Related