The Cost of Houses in the City

The Cost of Houses in the City

RES/342

September 19, 2011

Sara Skowronski

The Cost of Houses in the City

For Week 3 assignment, Team C has decided to delve deeper into the real estate market by researching whether homeowners are paying more for homes closer to the city because of location or because of square footage. In our paper, we will formulate both a numerical and verbal hypothesis statement regarding our research issue mention above. Additionally, we will display the five-step hypothesis test on the data, while also describing and explaining how the findings from our hypothesis testing can be utilized to answer our research question. Finally, our paper will include raw data tables, the results of our computations, as well as our graphical and tabular methods utilized in displaying our results.

Numerical and Verbal Hypothesis

In our last research question we formulated a hypothesis that concluded the cost of homes is greater within 15 miles of the center of the city. This conclusion now poses us with another question: are residents paying more for homes closer to the city because of location or because of sq. footage? In order to answer this question we must compare two independent groups of data; the mean sq. footage of homes within 15 miles and the mean sq. footage of homes outside of 15 miles from the center of a city, illustrated in the verbal hypothesis below.

[pic]: Mean sq. footage of homes is higher within 15 miles of center city

[pic]: Mean sq. footage of homes is not higher within 15 miles of center city

The verbal hypothesis statement above must now be converted into a numerical hypothesis statement that will allow us to compare the two samples through a five-step hypothesis test. The data set provides us with two independent samples: homes within 15 miles of the center of the city and homes not within 15 miles of the center of the city. We will be utilizing a left-tailed test for our hypothesis...