Causal Inference and Direct Effects
Pearl’s Graph Surgery and Jouffe’s Likelihood MatchingIllustrated with Simpson’s Paradox and a Marketing Mix Model
Stefan Conrady,stefan.conrady@conradyscience.com Dr. Lionel Jouffe,jouffe@bayesia.comSeptember 15, 2011
Conrady Applied Science, LLC - Bayesia’s North American Partner for Sales and Consulting
Total Effects on Target 31
Causal Inference
33Pearl’s Do-Operator 33Direct Effects with Likelihood Matching (LM) 36Causal Inference as an Afterthought 39Causal Reasoning 40
Marketing Mix Optimization
40Linear Marketing Mix Optimization 40
Non-Controllable Variables and Non-Confounders
40
Summary
44
Appendix
About the Authors
46
Stefan Conrady
46
Lionel Jouffe
46
Contact Information
iii
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