Prediction, causation, and statistical inference

Lady tasting tea

Why causation matters in a business setting

What is a causal model?

Skepticism about data: Truman 1948 Election Poll

Skepticism about results: Is that really the best predictor?

Skepticism about causes: Is X really causing Y?

What is a strong correlation?

Pearson on correlation and causation

Correlation and regression

Challenge: What is causing what?

Solution: What is causing what?

Using probability to measure uncertainty

p-value review

Hypothesis testing checklist

Taleb on normality, mediocristan, and extremistan

Challenge: Evaluate significant finding

Solution: Evaluate significant finding

What are induction and deduction?

Hume on induction

Popper on induction and falsification

Taleb on induction

Counterfactuals: Pearl on induction and causality

Data mining vs. data dredging

Train/Test: What can go wrong?

A/B testing during the evaluation phase

The Two Cultures

Explain vs. predict

Comparing CRISP-DM and the scientific method

Applying the two methods at work

Review