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# Statistics - 5 Step Hypothesis Test

Nonparametric Hypothesis Testing Paper
Hypothesis
As current economic conditions influence the real estate market, consumers are faced with increasingly more options when purchasing a home. While prices fluctuate through market instability, there are constants in all dwellings that aide in determining which home a purchaser will buy. As needs differ, one measure that draws attention is the square footage of a home. Having space available in a home in order to have options for a home office, entertaining or future needs plays a major role in influencing home purchases (Linda Anderson, personal communication, January 26, 2009).
In a previous learning team assignment for Research and Evaluation 342, Learning Team A conducted two sample hypothesis tests to determine if the mean of the square footage was equal between three- and four-bedroom homes. By testing hypothesis and using data provided from the eResource page, the learning team was able to conclude that the square footage between three- and four-bedroom homes was not equal. By rejecting the null hypothesis, this was possible.
However, there are approaches other than two sample testing available to analyze the data and draw conclusions. Nonparametric testing is an alternate approach to test hypothesis. Leaning Team A intends to retest the data from the previous assignment using nonparametric testing in order to test the hypothesis that the square footage in three-bedroom homes is equal to that of four-bedroom homes. The alternate hypothesis is that the footages are not equal. To do so, Learning Team A will use the Wilcoxon Mann-Whitney test to determine the validity of the hypothesis.

The numerical hypothesis will continue as:
H0: µ1 = µ2
H1: µ1 &#8800; µ2
The data table used for the hypothesis test is as follows:
BEDRM SQ FOOT BEDRM SQ FOOT
3 2300 4 2300
3 2300 4 2100
3 2100 4 2400
3 2200 4 2100
3 2200 4 2100
3 2000 4 2200
3 2100 4 2600
3 2100 4 1900
3 1900 4 2000
3 2000 4 2300
3 2400 4 2100
3 2200 4 2300
3 2000 4 2200
3 2200 4 2200
3 2200 4 2500
3 1900 4 2200
3 2300 4 2600
3 1600 4 2300
3 2200 4 2600
3 2100 4 2300
3 1900 4 2300
3 2500 4 2400
3 2500 4 2900
3 2300 4 2100
3 2400 4 2900
3 2400 4 2100

Five-Step Hypothesis Test

References
Riggs, K., P., Jr., Raymond, G., T., Ph.D. (2008). "Economic and market trends in second half of 2007 and early 2008: an assessment and outlook. (LEADERSHIP ROUNDTABLE)."

#### Solution Summary

A Complete, Neat and Step-by-step Solution is provided in the attached Excel file.

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