Your real estate agent recently stated that houses in the suburb typically had an average price...

Question

Your real estate agent recently stated that houses in the suburb typically had an average price around 1200 ($000), but have recently changed. Test his claim at the 5% level of significance. Show all your calculations XXXXXXXXXXMarks) 2. Run a simple linear regression using the House prices and the size data and  a) Interpret the coefficients. b) Show the output from Excel including a scatter plot. (3 Marks) 3. What is the value of correlation coefficient? Interpret the correlation coefficient. (2 Marks) 4. Is the coefficient estimate for the Size statistically different than zero at the 5% level of significance? Set-up the correct hypothesis test using the results found in the table in question 2 using both the critical value and p-value approach. Interpret the coefficient estimate of the slope XXXXXXXXXXMarks)

Pooja · Accepted Answer

1)
Null hypothesis, ho: an average price is 1200 ($000). V/s Alternative Hypothesis, h1: an average price is not 1200 ($000),
Mean= 321,858 
sd= sqrt(var) 49578.87486
u= 1,200,000 
n= 50.00 
alpha= 5%
Critical value, z(a/2)
z(0.05/2)
1.960
Test statistic, z = (mean-u)/(sd/sqrt(n))
= (321858-1200000)/(49578.8748627181/sqrt(50))
-125.2429
P-value
2*(1-P(z 5%, I fail to reject ho at 5% level of significance and conclude that coefficient estimate for the Size is statistically equal to zero. beta1 = 0. Draper, N.

Your real estate agent recently stated that houses in the suburb typically had an average price around 1200 ($000), but have recently changed. Test his claim at the 5% level of significance. Show all...

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