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# The goal of this exercise is to get you to think about the causal relationships between variables

INSTRUCTIONS TO CANDIDATES

The goal of this exercise is to get you to think about the causal relationships between variables. We will do this using a simple dataset with two variables. Later on in class we will use a dataset with the same two variables, along with additional variables and a variety of techniques, to try to better understand the relationship between these two variables.

First, open up the excel sheet “XY” and create a scatter plot of the data, in excel (highlight the data, click on the “insert” tab at the top, and then select “scatter”).

1. In words, describe what you see (2-3 sentences). Consider the following: does it look like there is a relationship between the variables? How would you describe the relationship?

2. It turns out that X is an individual’s years of education and Y is that individual’s earnings. Is X causing Y? (Describe in 2-3 sentences)

4. List 1-3 other explanations for the pattern you see in the data, other than “X is causing Y.”

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