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Chapter 5: Problem 4

The article "That's Rich: More You Drink, More You Earn" (Calgary Herald, April 16,2002 ) reported that there was a positive correlation between alcohol consumption and income. Is it reasonable to conclude that increasing alcohol consumption will increase income? Give at least two reasons or examples to support your answer.

Short Answer

Expert verified
No, it is not reasonable to conclude that increasing alcohol consumption will increase income. Correlation does not imply causation. The correlation could be due to lurking variables. For instance, professionals earning higher might have more social gatherings involving alcohol. This does not mean drinking caused their higher income. Additionally, increasing alcohol consumption in a low wage job will not automatically result in an income rise, illustrating that drinking more doesn't directly cause increased income.

Step by step solution

01

Understand Correlation Does Not Imply Causation

Correlation and causation are different things. A correlation simply means that a relationship exists between two factors, but it does not indicate that one factor is the cause of the other. The fact that alcohol consumption and income concur does not imply that drinking more alcohol actually causes an increase in income. It could be that other factors are at play, which result in higher income earners consuming more alcohol.
02

Discuss Possible lurking/confounding variables

There might be lurking or confounding variables that make it seem like there's a direct relationship between alcohol consumption and income. For example, it could be that people with high income have more leisure time or tend to socialize more, and these occasions involve alcohol consumption. So, the increased alcohol consumption is a result of having a higher income, not the cause of it.
03

Provide Examples

You can think of examples to further illustrate this point. For instance, a person working in low wage job who begins to consume more alcohol does not mean his salary will automatically increase. Similarly, a well-earning professional may decide to stop drinking alcohol, but this won't necessarily cause a decrease in their income. These examples ensure their understanding of why increased alcohol consumption does not directly lead to increased income.

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