Selling price of houses in two years

This diagram again shows that the marginal relationship between Y and X may be misleading if the data are observational.

Marginal relationship between price and time
The overall mean sale price decreased between 2003 and 2004.
Conditional relationship for each district
The mean price in each individual district is higher — your own house is likely to be worth more!

The reason is that a larger proportion of sales were in poorer districts in 2004.

The marginal relationship was caused by a lurking variable, District.


The data are artificial.