Correlation vs Causation
The Basic Idea
If you’ve ever argued with someone who has taken statistics 101, you might have heard them say with pride, “correlation does not imply causation.” This mantra is repeatedly applied when people erroneously assume that two variables bear a cause-and-effect relationship rather than merely displaying a similar pattern of occurrences. Although the rooster’s crow happens every morning as the sun rises, it does not cause the sun to rise.
Classic examples that illustrate this concept often involve odd correlations with ice cream sales, such as forest fires, drownings, sunburns, and even shark attacks. Consider the correlation with forest fires, where the amount of forest fires increases alongside an increase in people buying ice cream. Does this mean that people buying ice cream are causing the fires? Certainly not. They merely display similar statistical patterns as they both occur when it’s hot in the summer. Although this example is an intuitive case where neither of the variables causes the other, many correlations can be more difficult to decipher.
You don't light a patch of the Montana brush on fire when you buy a pint of Haagen-Dazs
- Nate Silver, author of The Signal and the Noise
About the Authors
Dan Pilat
Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.
Dr. Sekoul Krastev
Dr. Sekoul Krastev is a decision scientist and Co-Founder of The Decision Lab, one of the world's leading behavioral science consultancies. His team works with large organizations—Fortune 500 companies, governments, foundations and supernationals—to apply behavioral science and decision theory for social good. He holds a PhD in neuroscience from McGill University and is currently a visiting scholar at NYU. His work has been featured in academic journals as well as in The New York Times, Forbes, and Bloomberg. He is also the author of Intention (Wiley, 2024), a bestselling book on the science of human agency. Before founding The Decision Lab, he worked at the Boston Consulting Group and Google.
