Data were collected for a sample of companies regarding their investment in quality improvement efforts and cost savings realized as a result (both measured as a percentage of sales revenue). The correlation coefficient for these data is r = 0.913. If the data were collected for individual departments within companies rather than at the company level, we would expect
A) a stronger correlation.
B) a weaker correlation.
C) the same correlation.
D) fewer outliers in the data.
E) the correlation coefficient of 1.

Question

Quizplus · Accepted Answer

When data are collected at a more granular level, such as individual departments within companies, the variability within each company is likely to increase. This increased variability can lead to a weaker correlation because the specific dynamics and efficiencies of individual departments can differ significantly, even within the same company, diluting the overall correlation observed at the company level.

Data Were Collected for a Sample of Companies Regarding Their