An introduction to Causal inference

Causal inference goes beyond prediction by modeling the outcome of interventions and formalizing counterfactual reasoning. In this blog post, I provide an introduction to the graphical approach to causal inference in the tradition of Sewell Wright, Judea Pearl, and others. We first rehash the common adage that correlation is not causation. We then move on to climb what Pearl calls the "ladder of causal inference", from association (seeing) to intervention (doing) to counterfactuals (imagining). We will discover how directed acyclic graphs describe conditional (in)dependencies; how the do-calculus describes interventions; and how Structural Causal Models allow us to imagine what could have been. This blog post is by no means exhaustive, but should give you a first appreciation of the concepts that surround causal inference; references to further readings are provided below. Messerli (2012) published a paper entitled "Chocolate Consumption, Cognitive Function, and Nobel Laureates" in The New England Journal of Medicine showing a strong positive relationship between chocolate consumption and the number of Nobel Laureates. I have found an even stronger relationship using updated data2, as visualized in the figure below. Now, except for people in the chocolate business, it would be quite a stretch to suggest that increasing chocolate consumption would increase the number Nobel Laureates. Correlation does not imply causation because it does not constrain the possible causal relations enough. If two random variables $X$ and $Y$ are statistically dependent ($X \perp Y$), then either (a) $X$ causes $Y$, (b) $Y$ causes $X$, or (c) there exists a third variable $Z$ that causes both $X$ and $Y$. Further, $X$ and $Y$ become independent given $Z$, i.e., $X \perp Y \mid Z$. An in principle straightforward way to break this uncertainty is to conduct an experiment: we could, for example, force the citizens of Austria to consume more chocolate, and study whether this increases the number of Nobel laureates in the following years.