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Hypothesis Testing: Agreement of Assessments

Do a complete hypothesis test on the attached problem, including hypothesis, decision rule, calculations of the statistic, decision, interpretation, and p- value.

Assume Equal Variances at (alpha) = .025 (using excel)

A certain company will purchase the house of any employee who is transferred out of state and will handle all details of reselling the house. The purchase price is based on two assessments, one assessor being chosen by the employee and one by the company. Based on the sample of eight assessments shown, do the two assessors agree? Use the .01 level of significance, state hypotheses clearly, and show all steps.

Assessments of Eight Homes ($ thousands)

Assessed By Home 1 Home 2 Home 3 Home 4 Home 5 Home 6 Home 7 Home 8 Company 328 350 455 278 290 285 535 745
Employee 318 345 470 285 310 280 525 765

Solution Summary

Using a level of significance, this solution determines whether to different assessments on various houses agree.