10 Paradoxes That Will Bite You in the Ass (2nd in Series) “Post hoc ergo propter hoc”

Cognitive Biases

June 9, 2020 Written by: W.B. “Bud” Kirchner

Approx Read Time: 4.5 Minutes

The Latin quote above perfectly captures the essence of today’s paradox. Read on for the translation and the rationale.

Background

“To every problem there is a most simple solution.” – Agatha Christie

While this series will touch on big and ugly paradoxes (we started with the 1st paradox being –  unbiased decisions) that are arguably easy to recognize, this example is so ‘obvious’ that one could get bitten by it through lack of attention or better sounding, “cognitive bias”.

Translation: “After this, therefore because of this.”  Yes – this is the quote that introduced the paradox of the day. Simply put, correlation does not equal causation.” (#3)

Context/Caveat

In starting this article, we think back to a comment by Einstein: “When the solution is simple, God is answering.”

What could be simpler than the need to keep in mind the difference between correlation and causation? What could be more challenging than always being sure – what is operating here?

Just to start with a caveat that this may not be as simple as it appears, we remind you that this is an issue not only in business but also science and philosophy. In the latter context, we can’t help but share an illustration from one of our favorite philosophers:

  • “Falsifiability, as described by Karl Popper, confirms we can never prove anything true but only false (classic example: “All swans are white until you see a black one.”). However, (and this is where it can bite you) not being able to prove something is wrong does not mean it is right.”

As Gerbis (#1) says “Humans are evolutionarily predisposed to see patterns and psychologically inclined to gather information that supports pre-existing views, a trait known as confirmation bias. We confuse coincidence with correlation and correlation with causality.”

decision making

Point being – we may not always be able to rely on our instincts to know the difference. In this regard, we encourage you to also refer to our article Thinking Errors: Part Three – A Field Guide to Thinking Errors for additional perspective.

Review

We share this with you in a straightforward summary per Singh (#4):

  • “Correlation is a statistical technique which tells us how strongly the pair of variables are linearly related and change together. It does not tell us the why and how behind the relationship but it just says the relationship exists.”
  • “Causation takes a step further than correlation. It says any change in the value of one variable will cause a change in the value of another variable, which means one variable makes another happen. It is also referred as cause and effect.”

And from Iperception (#2):

  • “While causation indicates that one event is the result of the occurrence of the other event; i.e. there is a causal relationship between the two events. This is also referred to as cause and effect.”
  • “Causality is an area that is frequently misunderstood and it can be notoriously difficult to infer causation between two variables without doing a randomized controlled experience.”

In closing – we offer up this rule of thumb by Deming:

“In God we trust. Everyone else, bring data.”

Bibliography 

  1. Nicholas Gerbis – 10 Correlations That Are Not Causations
  2. Iperception – Causation vs Correlation – What’s the difference
  3. Stacy Shaw – Correlation, Causation, and Coffee
  4. Seema Singh – Why correlation does not imply causation?
  5. “Preventing Common Thinking Errors,” Published on July 18, 2013 by William R. Klemm, D.V.M Ph.D. in Memory Medic

Relevant Business Brain Model articles:

  1. Thinking Errors: Part Three – A Field Guide to Thinking Errors
  2. 10 Paradoxes that Will Bite You in the Ass (1st in Series)
  3. The stone age didn’t end because they ran out of stones

About the Author: W.B. “Bud” Kirchner is a serial entrepreneur and philanthropist with more than 50 years of business success. He is not a scientist or an academic but he does have a diversified exposure to neuroscience, psychology and related cognitive sciences. Generally speaking, the ideas he expresses here are business-angled expansions of other people’s ideas, so when possible, he will link to the original reference.