Real Estate Discussion
Not what you're looking for?
The B&K Real Estate Company sells homes and is currently serving the Southeast region. It has recently expanded to cover the Northeast states. The B&K realtors are excited to now cover the entire East Coast and are working to prepare their southern agents to expand their reach to the Northeast.
B&K has hired your company to analyze the Northeast home listing prices in order to give information to their agents about the mean listing price at 95% confidence. Your company offers three analysis packages: one based on a sample size of 100 listings, one based on 1,000 listings, and another based on a sample size of 4,000 listings. Because there is an additional cost for data collection, your company charges more for the package with 4,000 listings than for the package with 100 listings.
Bronze Package - Sample size of 100 listings:
• 95% confidence interval for the mean of the Northeast house listing price has a margin of error of $24,500
• Cost for service to B&K: $2,000
Silver Package - Sample size of 1,000 listings:
• 95% confidence interval for the mean of the Northeast house listing price has a margin of error of $7,750
• Cost for service to B&K: $10,000
Gold Package - Sample size of 4,000 listings:
• 95% confidence interval for the mean of the Northeast house listing price has a margin of error of $3,900
• Cost for service to B&K: $25,000
The B&K management team does not understand the tradeoff between confidence level, sample size, and margin of error. B&K would like you to come back with your recommendation of the sample size that would provide the sales agents with the best understanding of northeast home prices at the lowest cost for service to B&K.
In other words, which option is preferable?
• Spending more on data collection and having a smaller margin of error
• Spending less on data collection and having a larger margin of error
• Choosing an option somewhere in the middle
For your initial post:
• Formulate a recommendation and write a confidence statement in the context of this scenario. For the purposes of writing your confidence statement, assume the sample mean house listing price is $310,000 for all packages. "I am [#] % confident the true mean . . . [in context]."
• Explain the factors that went into your recommendation, including a discussion of the margin of error
Purchase this Solution
Solution Summary
Step-by-step calculations are shown. A discussion of the margin of error and how it applies to the real estate company is given. The discussion contains over 450 words.
Solution Preview
Compute the confidence interval for each package by using the following formulas:
Lower limit = Mean - Margin of error
Upper limit = Mean + Margin of error
Bronze package:
Margin of error of $24,500
$310,000 - $24,500 = $285,500
$310,000 + $24,500 = $334,500
I am 95% confident the true mean price of houses is between $285,500 and $334,500.
Silver package:
Margin of error of $7,750
$310,000 - $7,750 = $302,250
$310,000 + $7,750 = $317,750
I am 95% confident the true mean price of houses is between $302,250 and $317,750.
Gold package:
Margin of error of $3,900
$310,000 - $3,900 = $306,900
$310,000 + $3,900 = $313,900
I am 95% ...
Education
- MSc, California State Polytechnic University, Pomona
- MBA, University of California, Riverside
- BSc, California State Polytechnic University, Pomona
- BSc, California State Polytechnic University, Pomona
Recent Feedback
- "Excellent work. Well explained."
- "Can you kindly take a look at 647530 and 647531. Thanks"
- "Thank you so very much. This is very well done and presented. I certainly appreciate your hard work. I am a novice at statistics and it is nice to know there are those out there who really do understand. Thanks again for an excellent posting. SPJ"
- "GREAT JOB!!!"
- "Hello, thank you for your answer for my probability question. However, I think you interpreted the second and third question differently than was meant, as the assumption still stands that a person still independently ranks the n options first. The probability I am after is the probability that this independently determined ranking then is equal to one of the p fixed rankings. Similarly for the third question, where the x people choose their ranking independently, and then I want the probability that for x people this is equal to one particular ranking. I was wondering if you could help me with this. "
Purchase this Solution
Free BrainMass Quizzes
Measures of Central Tendency
This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.
Terms and Definitions for Statistics
This quiz covers basic terms and definitions of statistics.
Measures of Central Tendency
Tests knowledge of the three main measures of central tendency, including some simple calculation questions.
Know Your Statistical Concepts
Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.