Suppose economists at the World Bank discover a positive correlation between family income and female education levels in developing countries.We can say that
A)the correlation is inconsistent with a theory that an increase in female education levels causes an increase in family income.
B)an increase in family income causes an increase in female education levels.
C)an increase in female education levels causes an increase in family incomes.
D)there is a causal relationship between family income and female education.
E)the observed correlation is consistent with a theory that an increase in female education levels causes an increase in family income.

Question

Quizplus · Accepted Answer

The positive correlation between family income and female education levels suggests that an increase in female education levels can lead to an increase in family income. This is consistent with a theory that educating women can have positive spillover effects on their families and communities. While it is possible that an increase in family income could cause an increase in female education levels, the correlation between the two variables specifically suggests that the direction of causality may be from education to income. Therefore, choice E is the best answer.

Suppose Economists at the World Bank Discover a Positive Correlation