A business student conjectures that the Internet caused companies to become more profitable, since many transactions previously handled "face-to-face" could now be completed online. The student compares earnings from a sample of companies from the 1980s to a sample from the 2000s. Explain why this is an observational study. If indeed profitability increased, can she conclude the Internet was the cause? Why or why not?

Question

Ramon Hampton

Business

24 November, 07:08

A business student conjectures that the Internet caused companies to become more profitable, since many transactions previously handled "face-to-face" could now be completed online. The student compares earnings from a sample of companies from the 1980s to a sample from the 2000s. Explain why this is an observational study. If indeed profitability increased, can she conclude the Internet was the cause? Why or why not?

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Ronin Durham · Answer 1

Answer: This is an observational study. The reason being that in an observational study, the subject in the study are put into treatment groups or control groups either by their own action or by someone else who is not involved in the research study but in a controlled experiment, researcher take control by randomly assigning subjects to control or treatment group.

Whereas,

Experimental studies are ones where researchers introduce an intervention and study the effects. Experimental studies are usually randomized, meaning the subjects are grouped by chance.

If indeed profitability increased, she cannot conclude the Internet was the cause, this is due to the redundancies i. e. the results of observational studies are, by their nature, open to dispute. They run the risk of containing confounding biases.