Application of Correlation Analysis of Factors to Develop a Causal Loop Diagram of Local People's Well‐Being Surrounding the Reservoirs

ABSTRACT The reservoirs are long‐lived infrastructures interrelated to the well‐being of the local community. This study focuses on a comprehensive analysis of the well‐being factors of the local people surrounding the reservoirs. The study aims to find and understand the relationship of variables influencing well‐being and develop a causal loop diagram (CLD) to illustrate the complex relationship by applying correlation and regression analysis data from households. However, it is acknowledged that statistical associations alone do not imply causation. Additional validation is required to ensure that these connections reflect actual causal mechanisms rather than coincidental statistical patterns. Participation in water management and appropriate discrimination handling in obtaining water were the most correlated variables. Meanwhile, a family's net income had the highest level correlation with crime in residential areas and a confidence of livelihoods. These data were used to develop the CLD by representing the amount, level, direction and characteristic of correlations with connection line, line colour, arrowhead and the polarity symbol, respectively. The CLD serves as a decision‐making tool to understand the complex interrelation of variables and improve well‐being factors impacting sustainable water resources development projects.