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”).
Second, answer the questions below:
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)
3. On a scale of 1-10 how certain are you about your answer to (2)?
4. List 1-3 other explanations for the pattern you see in the data, other than “X is causing Y.”
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