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Hypotheis Test on Real Estate Data

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Perform a five-step hypothesis test:

H0: The average price of a large home a(bove two-thousand square feet) is equal to the average price of a small home (below two-thousand square feet).

H1: The larger the home the higher the price

[Please refer to the attachment for the Real Estate Data].

See the attached file.

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Solution Summary

The solution provides step-by-step method of performing a two-tailed hypothesis test on real estate data. All the steps of hypothesis testing (formulation of null and alternate hypotheses, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) have been explained and the statistical analysis has been shown in details. The calculations have also been shown in EXCEL for better understanding.