1. Reading and Understanding Graphs
Interpreting Graphs, Correlation, Causation, and Omitted Variables
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Alright, so now let's do a quick review on interpreting graphs. Alright? We've been making them up to this point. Now let's analyze them a little bit. So first let's define these two points, these two terms. We've got correlation, which is the relationship between two variables that allows us to predict outcomes, right? So things are thought to be correlated if we are able to make predictions based on this information. And our next term here, causation, it's a relationship where one event triggers another one. So this is one thing causes another thing. This is basically cause and effect relationship, right? So causation, cause and effect. So let's look at an example here. We've got a graph here with outside temperature on the x axis and ice cream sales on the y axis. So what I'm trying to point out is that as the temperatures rise, people are going to buy more ice cream, so we might see a graph something like this, right, where as the temperature is rising, so are the sales of ice cream. Cool? And the idea here is right we see outside temperature going up, sales going up. This relationship what we see when they go up together or down together, this is called a positive correlation. Positive correlation, and it's also sometimes called a direct relationship. So this is when we see something like the x values going up, then the y value is also going up, or when the x value goes down, same thing, the y value is also going to go down. Right. So up together or down together is a positive relationship compared to what we call a negative relationship or an inverse relationship, that's when they move opposite. So that would be something where we see the x value going up. Keep it consistent with the colors there. We'll see the y value going down and the opposite, right. X going down and y going up. So let's think of an example of an negative or an inverse relationship. Let me get out of the way. We'll put a little graph right here. So maybe a negative relationship might be something, let's do a little one. Maybe we've got, you know, number of missed classes or let's say absences over here. Absence from class. And over here we'll put your grade. Right? So the idea is while absences are low so if you've got 0 absences, you might have a really high grade, and as the absences go up, your grade falls, right? So this is a negative relationship. The absences are going up and your grade is going down. Cool? So now in the next video, we'll do a little more discussion about interpreting graphs and some of the pitfalls that you might run into.