Economics · Econometrics & Statistical Methods
A study examining the relationship between India's urbanization rate and carbon emissions across states yields a high correlation coefficient of 0.92. However, the researcher suspects a spurious correlation. Which of the following is the most likely cause of this spurious correlation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A direct causal relationship between urbanization and emissions
- 2A third variable, such as industrial output, influencing both variables✓
- 3Random sampling errors reducing the correlation strength
- 4A negative correlation masked by data aggregation
Correct answer
A third variable, such as industrial output, influencing both variables
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