Question

Describe the problem of reverse causality in the context of the relationship between income and health.

Answer 1

In statistical terms, We usually study how Y is affected by X. Reverse causality explains how Y affects X and not the other way around. In simple terms, Y is causing X to change.

In our example, We consider Health to be our Y variable and Income to be our X variable. Causality will show how income affects health, but reverse causality implies how income is being affected by health.

This relationship is quite intutive. Keeping everything else constant,If a person is not healthy,then he is less productive and thus his income is affected.i.e bad health implies lesser income. In a similar manner, a healthy person is more productive and thus can earn high income. Therefore there is a direct relationship between health and income, where health directly affects income.