Sunday, June 30, 2013

Daniel Kahneman on correlation, causation and mean regression

It took Francis Galton several years to figure out that correlation and regression are not two concepts – they are different perspectives on the same concept: whenever the correlation between two scores is imperfect, there will be regression to the mean …
Causal explanations will be evoked when regression is detected, but they will be wrong because the truth is that regression to the mean has an explanation but does not have a cause.
Lars P. Syll
Regression to the mean – when causes trump statistics
quoting Daniel Kahneman | Professor Emeritus of Psychology and Public Affairs at Princeton University's Woodrow Wilson School and Nobel Laureate in Economics (2002)

No comments: