Question 10.33

10.33 Do larger houses have higher prices?

We expect that there is a positive correlation between the sizes of houses in the same market and their selling prices.

hsize

  1. Use the data in Table 10.5 to test this hypothesis. (State hypotheses, find the sample correlation and the statistic based on it, and give an approximate -value and your conclusion.)
  2. How do your results in part (a) compare to the test of the slope in Exercise 10.31 part (b)?
  3. To what extent do you think that these results would apply to other cities in the United States?
Table 10.7: TABLE 10.5 Selling price and size of homes
Price
($1000)		 Size
(sq ft)		 Price
($1000)		 Size
(sq ft)		 Price
($1000)		 Size
(sq ft)
268 1897 142 1329 83 1378
131 1157 107 1040 125 1668
112 1024 110 951 60 1248
112 935 187 1628 85 1229
122 1236 94 816 117 1308
128 1248 99 1060 57 892
158 1620 78 800 110 1981
135 1124 56 492 127 1098
146 1248 70 792 119 1858
126 1139 54 980 172 2010

10.33

(a) . There is significant evidence that the correlation is different from zero. (b) The results are identical. (c) The housing markets are likely different in other cities, so these results would not apply to them.