Steve has kindly plotted house price movements on a map so we can compare that with the bankruptcy growth map. Recall the observation that "where home prices rise steeply, bankruptcies fall". Notice that Steve reversed the color scheme so that blue indicates low bankruptcy growth and high home price growth. This helps us visually inspect the two maps (nice touch!).
- The assertion that low bankruptcy growth is associated with high home price growth makes sense only in California, the Eastern Seaboard and Florida
- In middle America, even though home prices did not rise by much (and we don't know how much "much" is without the legend), there exist many pockets of high bankruptcy growth counties
- Whether those pockets all constitute the "small-sample-size" regions marked out by the proviso on the original map is unclear
This article raises the issue of association versus causation. One might be tempted to conclude that by creating conditions for a rising real estate market, a county government can hope to control the growth in bankruptcies. Doing so is to confuse causation with association.
We already noticed that both house price and bankruptcy growth are related to geography, exposing the familiar coastal/middle or East/West/Central distinctions. Because so many metrics are correlated with such geographical segmentation, it is very difficult to argue that home price growth is the cause and bankruptcy growth is the effect. This is particularly so because we don't have a controlled experiment, only an observational study. Mahalanobis has written about "latent variables" before; those variables you don't include in the study can well be more important. Elsewhere, David Freedman has written much on causality from a statistician's perspective.
To answer Steve's question, the reason why I would like to see population density added to the plot is that as depicted, the areas of colors are proportional to the map areas (which because of projection are not even proportional to real physical areas) but the better index should be population density rather than map area. I was thinking along the lines of a cartogram but I don't know how to create one. It's always a challenge how you put the pieces together now that they are scaled and no longer map-sized.