Refer to Exercises 10.13 and 10.14 (pages 503–504). Suppose we’re interested in determining whether the population regression line differs from . We’ll look at this three ways.
hsales
Construct a 95% confidence interval for each property in the data set. If the model is reasonable, then the assessed value used to predict the sales price should be in the interval. Is this true for all cases?
The model means and . Test these two hypotheses. Is there enough evidence to reject either of these two hypotheses?
Recall that not rejecting does not imply is true. A test of “equivalence” would be a more appropriate method to assess similarity. Suppose that, for the slope, a difference within is considered not different. Construct a 90% confidence interval for the slope and see if it falls entirely within the interval . If it does, we would conclude that the slope is not different from 1. What is your conclusion using this method?