AP Micro & MacroEconomic Indicators & Data
Simpson's Paradox
Simpson's paradox is when a trend that appears in separate subgroups of data reverses or disappears once the groups are combined.
A relationship can point one way within every subgroup yet the opposite way in the aggregate, usually because a lurking variable is unevenly distributed across groups. A famous economics case: median U.S. wages rose overall even as wages fell within every education group, because the mix shifted toward more-educated workers. It is a powerful warning against trusting aggregate correlations.