A selection effect exists when some property of a thing is correlated with its being sampled. The classic example is a phone poll sampling only those people who have phones. Where only wealthy people have phones, such a poll would overestimate average wealth.
An observation selection effect exists when some property of a thing is correlated with the observer existing in the first place. The study of such effects is sometimes called "anthropic reasoning" or "anthropics", after the anthropic principle. For example, if intelligence hadn't evolved, we wouldn't exist. So it's not obvious that we can start from the observation that intelligence evolved here, and infer that such evolution is common, or that designing intelligence is easy.
Recent approaches to such effects have focused less on "anthropic principles" and more on candidate assumptions such as:
Such assumptions are needed to determine how we choose between theories predicting different sets of observers.
One approach to anthropic reasoning that has sometimes been attempted is to derive the right principles from decision theory.