Chapter 4 Causal Understandings and Scenarios

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Chapter 4Causal Understandings andScenarios

• International Futures
• Barry B. Hughes

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Causal Understandings and Scenarios

• Causal Analysis
• Helps us explicitly recognize such limits and
  more generally assists in understanding how
  complex processes might evolve in the future.

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Causal Understandings and Scenarios

• At the Root of Causal Analysis
• The distinction between independent and
  dependent variables or between cause and effect.
• Independent Variable - a factor in a relationship
  whose values are taken as given and which is
  presumed to cause or determine the dependent
  variable.
• Dependent Variable - a factor that is assumed to
  be caused by another variable, called the
  independent variable.

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Causal Understandings and Scenarios

• Causal Analysis
• Causal Relationships can be divided into two
  categories, positive and negative relationships.
• - Positive Relationship- exists when an
  increase in the independent variable leads to an
  increase in the dependent variable. In such
  instances decreases in the independent variable
  lead to decreases in the dependent variable.
• - Negative Relationship exists when an
  increase in the independent variable causes a
  decrease in the dependent variable.

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Causal Understandings and Scenarios

• It is often times difficult to distinguish
  independent and dependent variables. Thus a
  system of variables is created that feed back on
  each other in a complex cause-and-effect
  relationship.

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Causal Understandings and Scenarios

• Feedback Loops
• - Negative Feedback Loop - a feedback loop with
  an odd number of negative relationships.  The
  behavior of such a loop tends to be one of
  seeking an equilibrium.
• - Positive Feedback Loop - a feedback loop with
  an even number of negative relationships.  The
  behavior of such a loop tends to be either
  runaway growth or collapse.

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Negative Feedback Loop
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Positive Feedback Loop
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Causal Understandings and Scenarios

• Changing Forecasts and Creating Scenarios
• Scenario Analysis
• - Intervenes in the model and creation of a new
  forecast in order to compare with the base.
• Changing Parameters
• - A parameter is an exogenously specified number
  that influences the relationship between
  variables in the model.
• Run the Model
• Select Scenario

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Quiz Questions

• T or F    Causal analysis does not help us
  explicitly recognize limits and understand how
  complex processes evolve in the future.
• Two categories of  causal relationships area)
  Parents and friends    b) Positive and negative
  relationship    c) Females and Males
• T or F     In a Negative feedback loop an
  increase in population growth leads to an
  increase in family planning programs?
• T or F     A Positive feedback loop tends to only
  collapse.
• T or F     In a Positive feedback loop the death
  rate from AIDS increases which leads to a
  decrease in medical treatments.
• T or F     A Negative feedback loop is unstable.
• Give definition of scenario analysis.
• T or F     In a Positive feedback loop there are
  one positive and one negative linkage.
• T or F     In a Negative feedback loop an
  increase in AIDS leads to an decrease in
  population.
• T or F     It is easy to distinguish between
  independent and dependent variables.