Question
According to a high-profile realtor, houses in the sleepy town of Sun Beach have shown higher appreciation over the past three years than have houses in the bustling town of North Arden. To test the realtor’s claim, an economist has found fifteen recently sold homes in Sun Beach and fifteen recently sold homes in North Arden that were owned for exactly three years. The following table gives the appreciation (expressed as a percentage increase) for each of the thirty houses.
Appreciation rates in percent
Sun Beach 11.1, 8.5, 13.6, 8.3, 5.6, 12.3, 13.6, 6.9, 16.3, 9.1, 13.3, 14.5, 13.2, 11.4, 11.5
North Arden 9.6, 10.4, 10.8, 10.7, 10.0, 9.9, 7.6, 8.9, 11.6, 8.6, 9.0, 5.1, 10.0, 8.6, 10.2
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Assume that the two populations of appreciation rates are normally distributed and that the population variances are equal. Can we conclude, at the 0.05 level of significance, that houses in Sun Beach have higher appreciation over the past three years than houses in North Arden? Perform a one tailed test
A. null hypothesis
B. alternative hypothesis
C. type of test statistic if then degrees of freedom?
D. Value of test statistic
E. Critical value at 0.05 level of significance
F. Can we conclude that houses in Sun Beach have higher appreciation over the past three years than houses in North Arden?
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