Publications
Publications
- November 5, 2021
- Harvard Business Review Digital Articles
Leaders: Stop Confusing Correlation with Causation
By: Michael Luca
Abstract
We’ve all been told that correlation does not imply causation. Yet many business leaders, elected officials, and media outlets still make causal claims based on misleading correlations. These claims are too often unscrutinized, amplified, and mistakenly used to guide decisions. It’s easy to see how these mistakes occur, as a large body of research in behavioral economics and psychology has highlighted systematic mistakes we can make when looking at data. This article explores avoidable mistakes that have occurred as a result of misinterpreted correlations, and lays out a path for business leaders to more effectively interpret empirical patterns and leverage data to guide decisions.
Keywords
Behavioral Economics; Data Analysis; Organizations; Decision Making; Data and Data Sets; Analysis; Learning
Citation
Luca, Michael. "Leaders: Stop Confusing Correlation with Causation." Harvard Business Review Digital Articles (November 5, 2021).