What type of bias may be present? why do you suspect the presence of the bias you have identified?

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Epidemiology and Health services Research

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A study to assess the association of diabetes and smoking compared a group of hospitalized individuals with diabetes (cases) with a group of volunteer individuals without diabetes (controls) who were full-time employees of the same hospital where the cases were identified.  The results from this study reported, for the first time in the literature, a strong association between diabetes and smoking.

1. What type of bias may be present? why do you suspect the presence of the bias you have identified?
2. The magnitude of this association is likely to be either over-or underestimated.  Which do you think is the case, and what makes you think so?