Why do we make decisions that contradict basic logic? What are some examples of illogical decision-making?

One of the most common reasons we fail at logical decision-making is that we mistake correlation for causation. If two variables are correlated, it doesn’t mean one caused the other. In fact, causation is less likely.

Here’s how mistaking correlation for causation results in misguided, irrational decisions.

## Correlation Vs. Causation

Sometimes, we make unwise decisions because we assume that evidence shows causation when it really shows a correlation. When evidence reveals causation, it demonstrates that one variable causes another. When you base your decisions on causal evidence, you can feel confident that your decision will likely have a similar outcome.

By contrast, a correlation is evidence that two variables are related. However, just because two variables are related doesn’t mean that one causes the other. When you base your decisions on correlative data, you may make a wrong choice or waste your efforts.

For example, imagine you have a business that sells hand-knit sweaters. During your company’s first summer, you notice your sales are low. In response, you decide to invest extra time and money in marketing. When your sales surge from October to January, you attribute this increase to your recent marketing efforts. You then make this plan: Any time you notice a dip in sales, you’ll increase your advertising.

However, this plan may be a waste of your time and energy: It’s possible that your advertising efforts and your increase in sales may only be correlated. Perhaps your surge in sales from October to January was due to the fact that people typically buy more sweaters during colder months, not due to your advertising efforts.

### A Solution: Base Your Decisions on Evidence That Shows Causation

To base your decisions on evidence that reveals causation instead of correlations, Bevelin recommends that you look for strong evidence that one variable causes another. For example, you could consult with other knitting entrepreneurs and compare data on when your sales rose and fell. Imagine that their sales also rose in the autumn, whether or not they ramped up their advertising efforts during that period. This comparison would reveal that there’s more evidence that the weather—not your marketing efforts—caused your autumn sales to increase.

Logical Decision-Making: Why Are We So Bad at It?

#### Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.