How Likely is Simpson's Paradox in Path Models?

Abstract

Simpson's paradox is a phenomenon arising from multivariate statistical analyses that often leads to paradoxical conclusions in the field of e-collaboration as well as many other fields where multivariate methods are employed. This work derives a general inequality for the occurrence of Simpson's paradox in path models with or without latent variables. The inequality is then used to estimate the probability that Simpson's paradox would occur at random in path models with two predictors and one criterion variable. This probability is found to be approximately 12.8 percent, slightly higher than 1 occurrence per 8 path models. This estimate suggests that Simpson's paradox is likely to occur in empirical studies, in the field of e-collaboration and other fields, frequently enough to be a source of concern.