# Cause and Effect.

## Presentation on theme: "Cause and Effect."— Presentation transcript:

Cause and Effect

Determining if a correlation exists is only the first step in a statistical analysis
More important than if a relationship exists is why it exists

Cause and Effect Relationship
A change in one variable (independent) produces a change in another variable (dependent) Examples: Lowering interest rates causes people to invest more money Carbon dioxide in the atmosphere causes an increase in the global temperature

Cause and effect relationships are nice because if we want to change the dependent variable we know we can produce this by changing the independent variable Sometimes there is a correlation between two variables but this is not a result of a cause and effect relationship.

Common Cause Factor An external variable is causing the two variables to change in the same way Examples: The number of cases of frostbite increases as the sales of winter tires increases

Reverse Cause and Effect Relationship
The independent and dependent variables are reversed Examples Crime rates rise as the number of people in prison rise so someone argues that releasing all the criminals will decrease the crime rate The mayor who orders his citizens to celebrate before the World Series so their team will win

Accidental Relationship
There is a correlation between two variables but it is just a coincidence Example The unemployment rate is increasing at the same time that the Blue Jays go on a winning streak

Presumed relationship
The relationship does not seem to be accidental but it is difficult to show a cause and effect or common cause relationship Example Heart attack rates drop as fitness clubs bring in more revenue

Extraneous Variables External variables that that affect either the independent or dependent variable (or both) These may make it difficult to determine if a causal relationship exists

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