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  • November 5, 2021
  • Article
  • Harvard Business Review Digital Articles

Leaders: Stop Confusing Correlation with Causation

By: Michael Luca
  • Format:Electronic
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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; Analytics and Data Science; Analysis; Learning

Citation

Luca, Michael. "Leaders: Stop Confusing Correlation with Causation." Harvard Business Review Digital Articles (November 5, 2021).
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About The Author

Michael Luca

Negotiation, Organizations & Markets
→More Publications

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More from the Author
  • What the Research Really Says about American Immigration, Book review of <i>Streets of Gold: America's Untold Story of Immigrant Success</i>, by Ran Abramitzky and Leah Boustan By: Michael Luca
  • Complex Disclosure By: Ginger Zhe Jin, Michael Luca and Daniel Martin
  • <i>The Family Firm</i> Review: Data-Driven Parenting By: Michael Luca
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