Cause-and-effect direction between X and Y may be determined by running the regression twice and seeing whether Y = β0 + β1X or X = β1 + β0Y has the larger R2.

Question

Quizplus · Accepted Answer

Running the regression twice and comparing R2 values cannot determine the causality or direction of the relationship between X and Y. It is possible to have a high R2 value for both equations, but it does not necessarily imply causation. Other methods, such as experimental designs and causal inference analysis, may be necessary to establish causation.

Cause-And-Effect Direction Between X and Y May Be Determined by Running