It is believed that the mean rental price of properties in area 2 is higher than that in area 1. A sample of 300 properties in area1 and 250 properties in area 2 are collected. An independent samples t-test is used to compare the mean rental price of two areas. Table 3 displays the independent samples t-test output. Table 3: Output of an independent sample t-test
Question 4
It is believed that the
Area 1 Area 2
Mean 194.93 240.84
Variance 652.50 2773.19
Observations 300 250
Hypothesized Mean Difference 0.00
df 345.00
t Stat -12.60
P(T<=t) one-tail 0.001
t Critical one-tail 1.65
P(T<=t) two-tail 0.002
t Critical two-tail 1.97
1) Give appropriate null and alternative hypotheses.
Null hypothesis H 0
Alternative hypothesis H 1
2) Find the p value for this test.
3) The alpha level is set at 0.05, what decision should be made about the hypotheses. Give evidence for your choice.
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