Randomised controlled trial
An experiment in which chance decides who gets the treatment and who doesn't, so that the two groups differ only by luck and any later difference can be put down to the treatment.
In plain English
If people choose their own group, the groups differ in many ways you can't see: health, money, motivation. A coin, a lottery or a birthday splits those hidden differences roughly evenly, leaving only the thing you changed. That's why one well-run randomised trial is worth more than a pile of comparisons between people who chose differently. Its limit is that it answers the question only for the kind of people and situations it tested.
Uncle Gary explains
Kevin's boss compared staff who chose to work from home with staff who didn't and concluded that home is worse. A company that split its staff by birthday found no difference in performance and fewer people quitting.
Why it matters for your money
Most claims that a product or habit makes you richer compare people who chose it with people who didn't. Without random assignment, you can't tell the product from the kind of person who buys it.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.