In September 2007, U.S home prices fell at a record pace, and price declines in Los Angeles and Orange Counties in California outpaced other major metropolitan areas ( Los Angeles Times November 28, 2007). The report was based on the standard and poor's/Case-Shiller index that measures the value of single - family homes based on their sales histories. According to this index, the prices in San Diego dropped by an average of 9.6% from a year earlier. Assume that the survey was based on recent sales of 34 houses in San Diego that also resulted in a standard deviation of 5.2%. Can we conclude that the mean drop of all home prices in San Diego is greater than the 7% drop in Los Angeles?.
In September 2007, U.S home prices fell at a record pace, and price declines in Los Angeles and Orange Counties in California outpaced other major metropolitan areas ( Los Angeles Times November 28, 2007). The report was based on the standard and poor's/Case-Shiller index that measures the value of single - family homes based on their sales histories. According to this index, the prices in San Diego dropped by an average of 9.6% from a year earlier. Assume that the survey was based on recent sales of 34 houses in San Diego that also resulted in a standard deviation of 5.2%. Can we conclude that the mean drop of all home prices in San Diego is greater than the 7% drop in Los Angeles?.
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