Statistics · medium

What is the difference between correlation and causation, and how do you get closer to causation without an experiment?

Asked in Data Analyst interviews, in the Statistics round.

Short answer

Correlation is co-movement, causation needs a counterfactual. Without a randomized test you approximate one with a natural experiment, difference in differences, regression discontinuity, matching or instrumental variables, each with assumptions you must state.

How to answer it

Correlation says two things move together. Causation says changing one would change the other. The gap between them is the confounder: a third thing that drives both, like summer driving both ice cream sales and drownings.

A randomized experiment closes the gap by construction, because randomization balances every confounder, known and unknown. When you cannot randomize, you borrow structure from the world:

The interview move is to name the assumption each method rests on and what would break it, not to list the methods.

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