Correlation is not causation
January 12, 2010 | industry, positive media coverage, research | Comments (0)Econ4U takes on an anti-payday lending “study”:
An unfortunate example of this error appeared recently in a magazine called The American Banker. Two sociology professors from George Washington University (GWU) took to the opinion page to promote a recent study which claims an increase in the concentration of payday lending stores causes an increase in violent crime.
The big problem with such a broad claim is that the study in question finds correlation between payday lenders and violent crime, not causation. This kind of academic overreach is not only irresponsible – it’s also dangerous. Strong conclusions based on faulty logic could cause policymakers to take rash actions with harmful unintended consequences for the poorest among us.
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