Question

Table 1 Independent Sample Test of Means for Office Space Comparison of Buildings within One Mile of the Freeway and Not-Within One Mile of Freeway 99% Confidence Sig. Mean Std. Error Interval of the Difference Upper 1.22 1 .130 | 232 1 195506 1 160159-T 635942 244 930 Floor Space in Square Foot -1.921 30 064 939 176 488 828 -2283.451 405.098 Calculated T d (2-tailed Difference Difference Lower Assessed Value 30 337 5.047 5.169 19.262 9.168 Age 976 John Goodest and Bill Roostaman are wondering how the assessed value of office spaces is determined. First, is it possible that office buildings that are within one mile of the freeway are assessed higher than buildings that are more than one mile from the freeway? Using the results in Table 1, Test the hypothesis at.01 Level of Significance that there is no significant difference in Assessed Values and Age between buildings that are within One Mile of the Freeway and those that are more than One Mile from the Freeway (50 Points). a. State the Null and Alternate Hypotheses (Present the mathematical statement as well the meaning in common language) b. What is the Critical Z value for the Hypothesis Test, assuming a large sample? c. State the Decision Rule and state your conclusion

Answer 1

a) Here the test of hypothesis is

H0: There is no significant difference in Assessed values and Age between the buildings.

H1: There is a significant difference in Assessed values and Age between the buildings.

b) For a large sample ,

The critical Z value at 0.01 is 1.64

Cri. Z = 1.64

c) If calculated Z value is greater than the critical Z ,then reject H0.

i.e. Reject H0 if cal. Z > cri. Z

Also if p-value < 0.01 then reject H0.

Conclusion: Here p-value > 0.01, we accept H0 and conclude that Ther is no significant difference in Assessed values and Age between the buildings.