SHOCK DISCOVERY - GURUHOGG'S LAUGHTER CAUSES SCOTTISH ECONOMIC GROWTH
New research by the University of Life shows that the rate at which GuruHogg laughs is highly correlated with the rate of growth of Scottish GDP. Alex Salmond has already announced his intention to tickle GuruHogg constantly. GuruHogg has yet to respond.
Spot anything wrong with this news story?
Yes, that's right. Correlation is NOT the same as causation.
Just because two things are highly correlated does not mean that one causes the other. I suspect a large percentage of news stories are based on this misunderstanding.
So the next time you see a fantastic story about A causing the seemingly irrelevant B, read the story carefully and use some intuition to see whether it's good economics or not (this applies to all economics, not just behavioural stuff).
Recommended listening;
Make 'em Laugh by Donald O'Connor
Also applies to cancer scares, cancer cures and a lot of "health" stories as well as general social observations. Good point well made sir!
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