EXAMPLE 2.11

Education spending and population: Benchmarking. We expect that states with larger populations would spend more on education than states with smaller populations.⁶ What is the nature of this relationship? Can we use this relationship to evaluate whether some states are spending more than we expect or less than we expect? This type of exercise is called benchmarkingbenchmarking. The basic idea is to compare processes or procedures of an organization with those of similar organizations.

Figure 2.4 is a spreadsheet giving the education spending and the populations of the 50 U.S. states for 2015. Figure 2.5 is a scatterplot of the education spending versus the population with a straight line. The scatterplot shows a strong positive relationship between these two variables.