controlling for other factors that might also change with x.

A common misconception is that economists like regressions because, for

example, the regression we are considering shows that x causes y.  This

might be true in some cases, but it is certainly not universal in economics. 

Suppose, for example, that our first example is a demand curve where x is

the price and y is the quantity.  The price does not cause the quantity

because price and quantity are jointly determined by two equations, supply

and demand.  Economists think that regression models are useful in supply

and demand settings even though price does not cause quantity.

 

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