SOLUTION: A real estate agent in the coastal area of Georgia wants to compare the variation in the selling price of homes on the oceanfront with those one to three blocks from the ocean. A

Algebra ->  Algebra  -> Probability-and-statistics -> SOLUTION: A real estate agent in the coastal area of Georgia wants to compare the variation in the selling price of homes on the oceanfront with those one to three blocks from the ocean. A      Log On

Ad: Algebra Solved!™: algebra software solves algebra homework problems with step-by-step help!
Ad: Algebrator™ solves your algebra problems and provides step-by-step explanations!

   

Question 347681: A real estate agent in the coastal area of Georgia wants to compare the variation in the
selling price of homes on the oceanfront with those one to three blocks from the ocean.
A sample of 21 oceanfront homes sold within the last year revealed the standard deviation
of the selling prices was $45,600. A sample of 18 homes, also sold within the last
year, that were one to three blocks from the ocean revealed that the standard deviation
was $21,330. At the .01 significance level, can we conclude that there is more variation
in the selling prices of the oceanfront homes?

Answer by stanbon(57967) About Me  (Show Source):
You can put this solution on YOUR website!
A sample of 21 oceanfront homes sold within the last year revealed the standard deviation of the selling prices was $45,600.
-------------------------
A sample of 18 homes, also sold within the last year, that were one to three blocks from the ocean revealed that the standard deviation was $21,330.
---------------------------
At the .01 significance level, can we conclude that there is more variation
in the selling prices of the oceanfront homes?
--------------------
Ho: sigma(ocean)^2-sigma(non)^2 = 0
H1: sigma(ocean)^2-sigma(non)^2 > 0
---
I ran a 2-Sample Ftest and got the following:
test statistic: F = 4.5703
p-value = 0.0013
-----
Conclusion: Since the p-value is less than 1%, reject Ho.
========================
Please let me know if you do not understand this answer.
========================
Cheers,
Stan H.