Purchase Solution

House Pricing and Resale Value Problems

Not what you're looking for?

Ask Custom Question

The national median sales price for new single-family homes is $230,000 (The Associated Press, March 25, 2006). Assume that the following data were obtained for sales of existing single-family homes in Houston and Boston.

Greater than $230,000 Equal to $230,000 Less than $230,000

Houston 11 2 32
Boston 27 1 13

a. Is the median resale price in Houston lower than the national median of $230,000? Use a statistical test with ? = 0.05 to support your conclusion

b. Is the median resale price in Boston higher than the national median of $230,000? Use a statistical test with ? = 0.05 to support your conclusion

Purchase this Solution
Solution Summary

In this solution we explain how to discover information about the median resale price in two cities based on the given data.

Solution Preview

** Please see the attachment for the complete solution **

a) Here, n = 11 + 32 = 43
The null and alternative hypotheses are:
Ho: The median resale price in Houston is greater than or equal to the national median of $230,000
Ha: The median resale price in Houston is less than the national median of $230,000
The null hypothesis that the population median is greater than or equal to $230,000 is expressed by the binomial distribution hypothesis Ho: p ≥ 0.50.
If Ho were true as an equality, we would expect 0.50(43) = 21.5 resale prices to have a plus sign. The sample result showing 11 plus signs is in the lower tail of ...

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.

View More Free Quizzes
Related BrainMass Solutions

  • Equivalent annual cost of owning the house

    The equivalent annual cost of owning the house with resale value would be 18,000. The solution explains how the calculate the equivalent cost of owning the house given the present price and taxes

  • Two-sample Dependent or Matched pairs T-test

    The most expensive room in the house to remodel is the kitchen, with an average cost of $23,400. In terms of resale value, is remodeling the kitchen worth the cost?

  • Income Statement - Robert's House of Formals

    The fixtures in the department would have no resale value and would be hauled to the county dump. Prepare an analysis, using the following form to determine whether the department should be dropped.

  • Jameson Corporation: Entries for reacquisition and resale of stock: par value, cost

    stock 88,000 This solution helps with problems that involve entries for re-acquisition and resale of stock.

  • Statistics Problem Set: Hypothesis Testing

    Suppose random samples of 13 houses in Houston and 11 houses in Chicago that are for resale are traced. The data shown here represent the number of days each house was on the market before being sold.

  • Price discrimination in case of patented products

    Measuring price elasticity of demand across segments requires lot of research and accuracy which is sometimes quite expensive. Any inaccuracy in findings may lead to wrong pricing policy and can hamper sale volumes and profits. 2.

  • You have decided to acquire a new car that costs $30,000.

    PV of 400 for 36 months is 12,764.72. 30000 - 12764.28 =17,235.28 PV of resale value or 21,892.89 resale break-even. This posting provides the solutions to the student's problems.

  • Buying Car

    She looks for four things in a car: overall quality, roominess, standard options that the car comes equipped with, and resale value after 5 years. Further, the importance weights of these attributes for her are 0.3, 0.2, 0.1, and 0.4 respectively.

  • Summarize the hedonic pricing method.

    A good example would be a house that in essence provides the characteristics of the house such as good design, painting, and architecture and so on.

View More Related Solutions