The term multilevel refers to a hierarchical data structure that often consists of individuals nested within some social context, for example, individuals within families or in organizational contexts such as pupils in school classes. Individual outcome variables are viewed as influenced by both individual characteristics and characteristics of the higherlevel units. In this perspective, measuring characteristics of these contexts is an important activity. Some of these characteristics may be measured directly at their natural level; for example, at the school level we can directly assess school size and school religious affiliation, and at the pupil level, intelligence and school success. In addition, we may move variables from one level to another, for instance, by aggregation. Aggregation means that the variables at a lower level are moved to a higher level, as is the case when the school mean of the pupils' intelligence scores are computed.
If the research interest is in the characteristics of the context, an approach often taken is to let subjects rate various characteristics of the context. In this case we are not necessarily interested in the subjects; they are just used as informants to judge the context. Such situations may arise in educational research where pupils may rate school characteristics such as school climate, or in health research where patients may be asked to express their satisfaction with their general practitioner, or community research where samples from different neighborhoods evaluate various aspects of the neighborhood in which they live. In these cases, we may use individual characteristics to control for possible measurement bias, but the main interest is in measuring some aspect of the higher-level unit (cf. Paterson, 1998; Raudenbush & Sampson, 1999; Sampson, Raudenbush, & Earls, 1997).
A simple example can be found in data from an educational research study by Kruger (1994) that was analyzed in more detail by Hox (2002). As part of the study, small samples of pupils from 96 schools rated their school principal on six items using 7-point rating scales to determine whether the principal had a people-oriented approach toward leadership. Ratings were available from 854 pupils in 96 schools; 48 of these schools had a male and 48 a female school principal. Cronbach's alpha for these six items is 0.80, a finding that is commonly considered sufficient (Nunnally & Bernstein, 1994).
However, this reliability estimate is difficult to interpret because it is based on a mixture of school-level and pupil-level variance. Because all judgments from the same school are ratings of the same school principal, within-school variance does not provide us with information about the school principal. From the measurement point of view, we want to concentrate only on the between-schools variance.
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