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Year 12 Maths Standard 1 (2027) Bivariate data analysis

Correlation vs Causation

20 practice questions 0 video lessons Theory + worked examples

Understand correlation and causation for NSW Year 12 Mathematics Standard 1 (NESA outcome MST-12-S1-06). A correlation means two variables tend to change together; a causal relationship means a change in one variable actually produces the change in the other.

You will learn to tell a correlation apart from a cause, see that even a strong correlation does not prove one, and look for other explanations such as a third (lurking) variable or coincidence — useful for judging claims like “ice-cream sales cause sunburn”.

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Theory

A correlation means two variables tend to change together; causation means one variable actually brings about the change in the other. This Year 12 Standard 1 (NSW) guide shows why a correlation, however strong, does not prove a cause, how to spot a third (lurking) variable or a coincidence, and what makes better evidence.

A correlation means that as one variable changes, the other tends to change too — the variables are associated.

The direction of a correlation is positive if both variables increase together (points rise to the right) and negative if one increases as the other decreases (points fall to the right).

Causation means a change in one variable really causes the change in the other. A correlation, however strong, does not on its own prove a cause.

Before claiming a cause, look for another explanation: a third (lurking) variable that drives both, coincidence (both simply rose or fell over the same years), or a cause that runs the other way. Better evidence comes from a controlled experiment: change only one thing, keep everything else the same, and allocate people or plots at random.

A causal claim is reasonable when there is a clear way one variable affects the other (a heater warms a room) and other factors are kept the same.

A third variable drives bothHot, sunny weather causes both ice-cream sales and sunburn cases, so they are correlated without one causing the other.Third variablehot weatherice-cream salessunburn casescausescausesstrong positive correlationbut no cause either way
Ice-cream sales and sunburn cases rise together, but eating ice-cream does not cause sunburn: hot, sunny weather increases both.
Correlated but not causalIce-cream sales and sunburn cases rise together. 10 20 30 40 50 10 20 30 40 50 60 Ice-cream sales (hundreds) Sunburn cases
A strong positive correlation, yet ice-cream does not cause sunburn.

There is no formula to calculate here. Keep the key rule in mind:

\[\text{correlation} \;\not\Rightarrow\; \text{causation}\]
correlationdoesnotimplycausation

A correlation between \(A\) and \(B\) can come from any of these:

\[C \text{ causes both } A \text{ and } B \qquad A \text{ causes } B \qquad B \text{ causes } A \qquad \text{coincidence}\]
CcausesbothAandB,orAcausesB,orBcausesA,orcoincidence
Better evidence. A randomised controlled experiment changes only one variable and allocates groups at random, so other differences between the groups cancel out.

How to judge a claim that one thing causes another

  1. Check for a correlation first — with no trend, a cause is very unlikely.
  2. Look for a third variable that could drive both, and ask whether both simply grew over time.
  3. Reverse the claim: could \(B\) cause \(A\) instead?
  4. Conclude: observed data shows association only; a cause is reasonable when there is a clear mechanism and other factors are kept the same, as in a controlled experiment.
Example 1 — Find the third variable
Over a year, a town’s weekly sales of hot chocolate and the number of people off work with a cold are strongly positively correlated. Does drinking hot chocolate cause colds?
Solution

Ask what a cold week does to both variables.

\(\text{cold weather}\)\(\Rightarrow\)\(\text{more hot chocolate sold}\)
\(\text{cold weather}\)\(\Rightarrow\)\(\text{people stay indoors together}\)
\(\text{indoors together}\)\(\Rightarrow\)\(\text{more colds spread}\)
coldweathergivesmorehotchocolatesoldandindoorcrowdingspreadsmorecolds

The weather (a third variable) drives both. No — the correlation is real, but hot chocolate does not cause colds; cold weather explains the link.

Example 2 — Coincidence over time
Over the last \(20\) years, both the number of online shoppers in Australia and the number of solar panels on Australian roofs have increased steadily, giving a strong positive correlation. What is the best conclusion?
Solution

Check whether both variables simply grew over the same years.

\(\text{online shopping}\)\(\nearrow\)\(\text{over time}\)
\(\text{solar panels}\)\(\nearrow\)\(\text{over time}\)
\(\text{both trend up together}\)\(\Rightarrow\)\(\text{coincidence}\)
bothtrenduptogethergivescoincidence

The correlation is coincidental; online shopping does not cause people to install solar panels.

Example 3 — When is a cause reasonable?
A student heats identical cups of water in the same microwave for different times, keeping all else the same. Longer heating gives hotter water. Is it reasonable to say the heating time causes the higher temperature?
Solution

Check what was changed and whether there is a clear mechanism.

\(\text{only the time changed}\)\(\Rightarrow\)\(\text{all else the same}\)
\(\text{microwaves heat water}\)\(\Rightarrow\)\(\text{clear mechanism}\)
onlythetimechanged,andmicrowavesheatwater

Yes — this is a controlled experiment, so a causal relationship is reasonable.

Example 4 — Which way does the cause run?
A survey of adults finds a negative correlation between hours of sleep each night and the stress level they report. A magazine says “more sleep causes less stress”. Why should we be careful?
Solution

Test the cause in both directions.

\(\text{more sleep}\)\(\Rightarrow\)\(\text{less stress?}\)
\(\text{more stress}\)\(\Rightarrow\)\(\text{less sleep?}\)
moresleepgiveslessstress,ormorestressgiveslesssleep

The cause could run either way, or another factor (such as work hours) may affect both. The correlation does not prove that sleep causes lower stress.

Example 5 — Getting better evidence
Students who chose to use a maths app scored higher on tests. The students who chose the app also tended to do more homework. (i) Does this prove the app raises marks? (ii) Name a possible third variable. (iii) Describe a better study.
Solution

Look at how the groups were formed.

\(\text{(i) app users differ in other ways}\)\(\Rightarrow\)\(\text{not proven}\)
\(\text{(ii) third variable}\)\(=\)\(\text{homework (effort)}\)
\(\text{(iii) random groups}\)\(\Rightarrow\)\(\text{fair test}\)
randomgroupsgiveafairtest

(iii) Take one group of students, randomly give half the app and half no app, keep everything else the same, then compare their test marks — a randomised controlled experiment.

Common pitfalls

Strong is still not proof. A strong correlation is still only an association — avoid writing “\(A\) causes \(B\)” just because the points lie close to a line.
Sensible is not proven. Even when a cause sounds sensible (more study, higher marks), data that was simply observed cannot prove it; say the link is plausible but not proven.
No trend, no cause. If there is no correlation (a random cloud of points), it is very unlikely that one variable causes the other.

Frequently asked questions

What is the difference between correlation and causation?

Correlation means two variables tend to change together. Causation means a change in one variable actually brings about the change in the other. A correlation on its own does not prove causation.

Does correlation imply causation?

No. Even a strong correlation is only an association. The link may come from a third (lurking) variable, from coincidence, or the cause may run the other way.

What is a lurking variable?

A lurking or third variable is something that affects both variables at once, making them move together. For example, hot, sunny weather increases both ice-cream sales and sunburn cases.

How can you show that one variable causes another?

Use a controlled experiment: change only one thing, keep everything else the same, and put people or plots into groups at random. Data that is simply observed cannot prove a cause. A cause is reasonable when there is a clear way one variable affects the other and other factors are kept the same.

If there is no correlation, can there still be causation?

It is very unlikely. If the points form a random cloud with no trend, one variable is very unlikely to be causing changes in the other.