1. EQ: What gets in the way of a good model?
Perils of predicting
EQ: What gets in the way of a good model?

2. Causation y x A direct cause and effect between variables
X = amount of artificial sweetener saccharin in a rat’s diet
y = count of tumors in the rat’s bladder y x
Very hard to conclude without conduction an experiment

3. Common response
The observed association between the variables x and y is explained by a lurking variable z. Both x and y change in response to changes in z. Creates an association even though there may be no direct causal link between x and y.
x = a high school senior’s SAT score
y = the student’s first year college grade point average x y z
z = study habits or IQ

4. Confounding
the effects on a response variable cannot be distinguished from each other. The confounded variables may be either explanatory variables or lurking variables.
x = whether a person regularly attend religious services
y = how long the person lives x y z
z = religious people may have healthier life styles

5. Causation, common response, or confounding ?
Does TV make you live longer?
There is a high positive correlation: nations with many TV sets have higher life expectancies
Common response: rich nations have more TV sets. Rich nations have longer life expectancies.
Lurking Variables: living conditions

6. Causation, common response, or confounding ?
Does exposure to industrial chemicals cause miscarriages?
A study showed that women who work in the production of computer chips have abnormally high numbers of miscarriages. The union claimed that exposure to chemicals used in production causes the miscarriages. Another possible explanation is that these workers spend most of their time standing up. Can we conclude that exposure to chemicals cause more miscarriages?
Confounding: There is no way to distinguish between number of hours standing and exposure.

7. Causation, common response, or confounding ?
Are grades and TV watching linked? Children who watch many hours of television get lower grades in school on the average than those who watch less TV.
Common response: lower IQ children may watch more TV. Lower SEC children may have parents that allow more TV.
Lurking variables: SEC status, IQ, Parent education level.

8. Causation, common response, or confounding ?
Ice cream and flu. There is a negative correlation between the number of flu cases reported each week throughout the year and the amount of ice cream sold in that particular week.
Common response: More ice cream is sold in warmer times when there are less cases of the flu.
Lurking variable: season or temperature

9. Causation, common response, or confounding ?
Raising SAT scores. A study finds that high school students who take the SAT, enroll in an SAT coaching course, and then take the SAT a second time raise their SAT mathematics scores from a mean of 521 to a mean of 561.
Confounding: A student who has taken the SAT test once may improve because of increased familiarity with the test. The student may also have increased knowledge from more classes.