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Hypothesis Testing of Variance: Breaking Distance of Cars

See attached data file.

Home Size and Selling Prices

Using the sample data that is attached, 21 homes with living areas under 2000 ft(2) have selling prices with a standard deviation of $32,159.73. There are 19 homes with living areas greater than 2000 ft(2) and they have selling prices with a standard deviation of $66,628.50. Use a 0.05 significance level to test the claim of a real estate agent that homes larger then 2000 ft(2) have selling prices that vary more than the smaller homes.

Let population 1 be homes having areas larger than 2000 square feet.



Upper CV: F =

Test Statistic [Show procedure.] F =

Conclusion (i.e. decision) on H0:

Final Conclusion on the claim by using Figure 8-7.


Solution Summary

The solution provides step by step method for the calculation of F statistic for Differences in Two Variances. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.