Correlation vs Causation

What’s The Difference?

Ben Le Fort
Modern Policy Options
3 min readFeb 13, 2019

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Photo by Ian Tormo on Unsplash

I can’t think of any two terms that are conflated more often than “correlation” and “causation”.

It’s not unusual to hear a politician say that two things are correlated. Usually what they mean to say is that there is a “causal” relationship between these two things and that specific one thing causes another to happen. An example might be a politician saying their opponent's policies have correlated with higher crime rates.

What they mean to say is that their opponent's policies have caused higher crime rates (usually such claims are dubious).

Before we go too far down the rabbit hole, let’s define each of these terms.

Correlation

  • Correlation is a statistical measure that indicates how two or more variables move together.
  • Correlation is measured between 0–1. 0 would indicate that two variables do not move at all in relation to the other. 1 would indicate that two variables move at the exact rate in relation to the other.
  • Correlation can be positive or negative. A positive correlation indicates that two variables move in the same direction. A negative correlation indicates that two variables move in the opposite direction.

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Ben Le Fort
Modern Policy Options

I write about behavioral finance & evidence based investing. Want to work with me? e: info@benlefort.com Here's my Substack: https://benlefort.substack.com/