Question

1. Give a specific example illustrating how correlation does not imply causation.

2. A grocery manager has data concerning their sales of fresh produce over a 20 year period. The manger plugs their data into excel and without plotting comes up with the equation for the regression line. Using this equation they estimate the produce sales for the upcoming year. What mistakes did they make? Explain.

Answer 1

Solution:

First reading the data check whether any relation between the independent and dependent variable. if there is no spourious correlation then plot the graph in the excel sheet. From this plot we can say that whether is there positive or negative relation between them. Then we can use data analysis tool in excel and we can build the regression model.

[OR]

1.) If we perform a survey to show the correlation between reading abilities and shoe size, we may get that large shoe size correlates to good reading skills. But large shoe size is not a cause for good reading ability.

2.) The data was not checked for normality. The regression line might not fit the data.

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