Though terrifying, economists dare to speak its name.
In J. K. Rowling’s series of Harry Potter novels, Lord Voldemort is so feared in the wizarding world that it is considered dangerous even to speak his name. So, nearly every witch or wizard and refers to Lord Voldemort instead with such monikers as You-Know-Who.
Among economists, the word “cause” is perhaps almost as terrifying as the name Voldemort.
Economists nowadays are trained to treat the word “cause” very carefully, and, by training, any causal claim is prohibited unless a great effort of smart work has been dedicated to support the claim. You might not notice this — it is rare to hear the word “cause” from economists, even though establishing causality is a key goal of many economics research projects.
The danger of making casual claims stems from the fact that it is hard to establish causality between two variables. For example, it might seem reasonable to believe that education causes differences in wages. Indeed, many data show that better-educated people receive higher pays. This observation, however, does not necessarily mean that higher pays are caused by higher education. This is because correlation does not imply causation. Perhaps, the reason is that we see people with advanced degrees earn more is driven by a third lurking variable: intelligence. Many other factors, e.g., family support, might also explain this observation.
