Suppose that you conduct a survey and collect data on people's health insurance plan (HMO, PPO, Fee-for-service). You plot the information and find that people who have less restrictive health insurance plans also have higher health care expenditures. From this information you conclude that higher risk individuals opt into less restrictive insurance plans. X O conclude that less restrictive health insurance plans leads to higher health expenditures. O cannot tell if this is due to the structure of the plan or if higher risk individuals opt into less restrictive plans