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8$\begingroup$ Note that you don't have to look at averages for Simpson's paradox to occur--just don't tell the model there are four groups. In addition, although it might be nitpicking, the fit in the lower plot is not very convincing, since it looks like it assumes all slopes to be equal, which you can clearly tell isn't the case. $\endgroup$– Frans RodenburgCommented Mar 3, 2020 at 5:39
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2$\begingroup$ As elsewhere in this this thread, mixing red and green is problematic for many readers. For anyone challenged by this colour choice, the graph shows four slightly overlapping clusters each summarized by upward sloping lines, whereas the whole dataset shows a negative relation. $\endgroup$– Nick CoxCommented Mar 3, 2020 at 12:04
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2$\begingroup$ Agreed Frans, taking averages is an over-simplification, as is the slope on the bottom graph. In fact, I believe both graphs are purely fictitious representations of the concept. They came from the last link in my answer, which was linked to from a different article I was reading that illustrated Simpson's paradox in an econometric setting: Tax Burdens, Per Capita Income, and Simpson’s Paradox $\endgroup$– TH58PZ700UCommented Mar 3, 2020 at 21:41
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1$\begingroup$ That's either very few or very many bedrooms! :) $\endgroup$– smcsCommented Mar 4, 2020 at 15:39
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