Question
In: Economics
How does regression analysis try to address the issue that correlation isn’t causation?
- How does regression analysis try to address the issue that correlation isn’t causation?
Solutions
Expert Solution
Regression Analysis:-
Regression Analysis is a mathematical calculation of the averages relationship between two or more changeable in terms of the original units of data.
An example of correlation but not causation:- The outstanding example of correlation not equaling causation can be build with ice creams and murder. According to this example, the rates of violent crime and murder have been known to jump ice cream sales also increases. But buying ice cream does not turn us into a killer.
Regression analysis try to address the issue that correlation is not causation:-
Regression deals with dependence amongst variables in a model. But this cannot always imply causation.
For example, if we say that rainfall affects crop yield and there is data that support this. So there is a one-way relationship between crop yield and rainfall. Crop Yield cannot affect rainfall.
In other words, there is no cause and effect reaction on regression if there is not causation.
Rahul Sunny answered 11 months agoRelated Solutions
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