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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
References
47
Contact Information
48
Conrady Applied Science, LLC
48
Bayesia S.A.S.
48
Copyright
48
Causal Inference and DirectEffectswww.conradyscience.com|www.bayesia.com
iii
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