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An observational study is one that does not involve any experimental studies. Consequently, observational studies do not control any variables. For example, a realtor wishes to appraise a house value. All the data used for this purpose are observational data. Many psychiatric studies involve observational data.

Frequently, in fitting a regression model (see Chapters 15 and 16), we use observational data. Similarly, in quality control (see Chapters 20 and 21), most of the data used in studying control charts for attributes are observational data. Note that control charts for attributes usually do not provide any cause‐and‐effect relationships. This is because observational data give us very limited information about cause‐and‐effect relationships.

As another example, many psychiatric studies involve observational data, and such data do not provide the cause of patient's psychiatric problems. An advantage of observational studies is that they are usually more cost‐effective than experimental studies. The disadvantage of observational studies is that the data may not be as informative as experimental data.