Hypothesis Test
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Refer to the real estate data which reports information on homes sold in Denver Colorado last year.
a. A recent article in Denver post indicated that the mean selling price of the homes in the area is more than $220,000. can we conclude that the mean selling price in the Denver area is more than $220,000. Use the .01 significance level. What is the p-value?
d. Determine the proportion of homes that have a pool. At the .05 significance level, can we conclude that less than 40 percent of the homes in the Denver area had a pool? What is the p-value?
I like to know how to complete the problem by hand using formulas The data is is my previous post.
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Solution Summary
The solution gives step-by-step explanations for answering both of the questions in the posting. Two different statistical tests are used to answer the questions in parts a and d. The solutions here can be used as examples of how to do a hypothesis test.
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a. A recent article in the Denver Post indicated that the mean selling price of the homes in the area is more than $220,000. Can we conclude that the mean selling price in the Denver area is more than $220,000? Use the .01 significance level. What is the p-value?
Here, you use a one-sided, one-sample t-test.
It's one-sided because we're testing that the mean is greater than $220,000, not just not equal to it, and it's one-sample because we're comparing the sample mean of one sample to a predetermined number. We use a t-test because we don't know the population standard deviation, but we can figure out the standard deviation of the sample.
Our null hypothesis is: The mean selling price in the Denver area is less than or equal to $220,000.
Our alternative hypothesis is: The mean ...
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