Cost-to-charge ratios (the percentage of the amount billed that represents the actual cost) for 11 Oregon hospitals of similar size were reported separately for inpatient and outpatient services. The...


Cost-to-charge ratios (the percentage of the amount billed that represents the actual cost) for 11 Oregon hospitals of similar size were reported separately for inpatient and outpatient services. The data are shown in the following table.




































































Cost-to-charge ratio
HospitalInpatientOutpatient
Blue Mountain7961
Curry General7567
Good Shepherd7464
Grande Ronde6150
Harney District10153
Lake District9974
Pioneer8966
St. Anthony6557
St. Elizabeth4944
Tillamook5347
Wallowa Memorial8472



(a)


Does there appear to be a strong linear relationship between the cost-to-charge ratio for inpatient and outpatient services? Justify your answer based on the value of the correlation coefficient and examination of a scatterplot of the data. (Round your answer to four decimal places.)

Based on the correlation coefficient value of  and the scatterplot, there is      relationship between the cost-to-charge ratio for inpatient and outpatient services. Looking at a scatterplot, there        .




(b)


Are any unusual features of the data evident in the scatterplot?


No. There is a moderate linear relationship between inpatient and outpatient cost-to-charge ratios and all the points follow that trend.Yes. There are one or more outliers present which alter how well a linear relationship describes the relationship between inpatient and outpatient cost-to-charge ratios.    Yes. There is no noticeable relationship between inpatient and outpatient cost-to-charge ratios and the points are randomly scattered throughout the graph.Yes. There is a noticeable nonlinear relationship between inpatient and outpatient cost-to-charge ratios with the graph suggesting a reciprocal transformation might be appropriate.Yes. There is a noticeable nonlinear relationship between inpatient and outpatient cost-to-charge ratios with the graph suggesting a square root transformation might be appropriate.





(c)


Suppose that the observation for Harney District was removed from the data set. Would the correlation coefficient for the new data set be greater than or less than the one computed in part (a)? Explain.


This point is an outlier and if it were removed, the linear relationship would be stronger, and the value ofr would therefore be greater.This point is not an outlier and if it were removed, the nonlinear relationship would be relatively unchanged and the value ofr would therefore be approximately the same.    This point is an outlier and if it were removed, the nonlinear relationship would be stronger, and the value ofr would therefore be greater.This point is an outlier and if it were removed, the linear relationship would be weaker, and the value ofr would therefore be smaller.This point is not an outlier and if it were removed, the linear relationship would be relatively unchanged and the value ofr would therefore be approximately the same.



Jun 10, 2022
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