Timothy Taylor — Pareidolia: When Correlations are Truly Meaningless

"Pareidolia" refers to the common human practice of looking at random outcomes but trying to impose patterns on them. For example, we all know in the logical part of our brain that there are a roughly a kajillion different variables in the world, and so if we look through the possibilities, we will will have a 100% chance of finding some variables that are highly correlated with each other. These correlations will be a matter of pure chance, and they carry no meaning. But when my own brain, and perhaps yours, sees one of these correlations, I can feel my thoughts start searching for a story to explain what looks to my eyes like a connected pattern.…

Classes in statistics emphasize that "correlation doesn't mean causation." The lesson here is even stronger. Correlation doesn't necessarily mean anything at all.Classes in statistics emphasize that "correlation doesn't mean causation." The lesson here is even stronger. Correlation doesn't necessarily mean anything at all.

Conversable Economist
Pareidolia: When Correlations are Truly Meaningless
Timothy Taylor | Managing editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota