Correlation and causation

On this page
  1. Definition
  2. How to compute
  3. Pitfalls

Definition

Correlation is a statistical association: two quantities move together. Causation claims that changing one makes the other change. Observational data gives the first; only an intervention with a control gives the second.

How to compute

Test an observed association for confounders: a common factor driving both quantities, or reverse direction. Remove the bias with randomisation (an A/B test), instrumental variables or control methods, and read the effect size and its uncertainty from an interval.

Pitfalls

The textbook case is seasonality and selection: ice-cream sales and drownings rise together, but the shared cause is summer. Regression controlling for observed variables does not rescue you from unmeasured confounders, nor does it yield a causal estimate. Regression to the mean after a spike or a dip also looks like an intervention effect.

Related terms

Connections map

Interactive subgraph: 7 nodes and 12 links around this page. Each node is keyboard-focusable; press Enter or Space to open its page. A full list of nodes and their links follows the graphic.

  • A/B test : Correlation and causation (Explicit link), ab-testing (Thematic link)
  • Bootstrap : Uplift modelling (Explicit link), Correlation and causation (Explicit link), ab-testing (Thematic link)
  • Correlation and causation : Uplift modelling (Explicit link), CUPED (Explicit link), Bootstrap (Explicit link), A/B test (Explicit link), ab-testing (Thematic link), causal-inference (Thematic link)
  • CUPED : Correlation and causation (Explicit link), Uplift modelling (Explicit link), ab-testing (Thematic link)
  • Uplift modelling : Bootstrap (Explicit link), Correlation and causation (Explicit link), CUPED (Explicit link), ab-testing (Thematic link)
  • ab-testing : A/B test (Thematic link), Bootstrap (Thematic link), Correlation and causation (Thematic link), CUPED (Thematic link), Uplift modelling (Thematic link)
  • causal-inference : Correlation and causation (Thematic link)

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