Simpson's paradox occurs when an association in aggregated data conflicts with the associations found inside relevant subpopulations. A single overall correlation can therefore conceal a different pattern within meaningful groups. section 10.4.1
Consider NBA team payrolls and regular-season wins. Across the full 2012–13 data, payroll and wins have a positive association; after separating teams by season-ending result, the relationships are flat. Coloring the groups makes the hidden structure visible. section 10.4.1
Reveal the paradox by treating aggregation as an analytical choice:
- Identify relevant subpopulations, such as playoff, non-playoff, and championship outcomes. section 10.4.1
- Recalculate or visualize each subgroup separately rather than trusting the pooled result. section 10.4.1
- Compare the directions and strengths of the pooled and subgroup relationships before drawing a conclusion. section 10.5
Payroll, wins, and season outcomes
A pooled NBA analysis reports a positive payroll–wins correlation, while grouping teams by season-ending factor produces flat within-group relationships. The result warns against interpreting one aggregate trend as the experience of every group. section 10.4.1 section 10.5

