Causal relationship definition

What is a Causal Relationship?

A causal relationship exists when one variable in a data set has a direct influence on another variable. Thus, one event triggers the occurrence of another event. A causal relationship is also referred to as cause and effect.

Examples of Causal Relationships

There are many examples of causal relationships in business. Here are several to consider:

  • There is a causal relationship between increased advertising expenditures and increased sales

  • There is a causal relationship between spending more time vetting new hire candidates and a decline in in-house fraud

  • There is a causal relationship between spending more money vetting supplier quality levels and a decline in product warranty claims by customers

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