In a re-analysis of published studies, Twenge and Im (2007) found that for the time period of 1958 to 2001, the need for social approval of people in the United States was positively correlated with changes in the Dow Jones Industrial Average during that same period (the correlation coefficient was 0.10).This means that:
A) the need for social approval caused people to invest more money in the stock market.
B) the need for social approval prevented people from investing money in the stock market.
C) when the need for social approval was high, the Dow Jones Industrial Average was also high.
D) when the need for social approval was high, the Dow Jones Industrial Average was low.

Question

Quizplus · Accepted Answer

The positive correlation coefficient of 0.10 indicates that as the need for social approval increased, so did the Dow Jones Industrial Average. Therefore, when the need for social approval was high, the Dow Jones Industrial Average was also high. This does not necessarily mean that the need for social approval caused people to invest more money in the stock market, as correlation does not equal causation.

In a Re-Analysis of Published Studies, Twenge and Im (2007)