Regional vs.

National Housing Comparison Report 1

Report: Regional vs. National Housing Price Comparison

[Your Name]

Southern New Hampshire University

Regional vs. National Housing Comparison Report 2

Introduction

Region: The selected region for analysis is the Mountain region.

Purpose: is to help the regional real estate company to determine whether the housing prices

in the regional market lower than the national market average, i.e., is the region lower or

higher than the national market average. The report will also determine whether the

square footage for homes in the Mountain region are different that the average square

footage for homes in the national market.

Sample: A random sample of 500 houses was selected from the Mountain region. The

dataset comprises details regarding houses in the region, such as the house listing price,

cost per square foot and square footage.

Questions and type of test: for the selected sample, two hypothesis tests will be performed.

a) First hypothesis:

 Hypothesis: test for the average listing price for homes in the Mountain region.

 Type: 1-Tail test

 Description: We are testing whether the average pricing for the Mountain region is

lower than the national market average.

b) Second hypothesis:

 Hypothesis: test for the average square foot for homes in the Mountain region.

 Type: 2-Tail test

 Description: We are testing whether the average square foot for the Mountain region

is different than the national market average.

Level of confidence: a specified level of estimation will be used to reject or confirm the

hypothesis while confidence intervals will demonstrate where the highest estimations of

the calculations performed on the data.

Regional vs. National Housing Comparison Report 3

1-Tail Test

1. Hypothesis

a) Population Parameter:

Population parameter being tested is the average listing price for houses in the

Mountain region.

b) Hypotheses:

The hypothesis test is for the average listing price, i.e., to determine whether it is

lower than the national average statistics. For the test, u represents the average listing

price for houses.

 Null hypothesis (Ho): u = $288,407. This means that the average listing prices

for houses in the Mountain region equals the national market average pricing.

 Alternative hypothesis (Ha): u < $288,407. This means that the average listing

prices for houses in the Mountain region is lower than the national market

average pricing.

c) Significance level: 0.05

2. Data Analysis

a) Sample Data Histogram

Figure 1: Histogram for Mountain region average house listing price

Regional vs. National Housing Comparison Report 4

b) Summary Statistics

Figure 2: Descriptive statistics for listing price variable

c) Sample Data Summary

Figure 3: National listing price histogram

In comparison to the national statistics, shown in Figure 3, the average listing price

histogram for the selected sample from the Mountain region is the same in terms of

shape (see Figure 1). Specifically, both histograms are symmetric, which means that

the mode, median, and mean are approximately equal. Furthermore, both histograms
Regional vs. National Housing Comparison Report 5

are right-skewed, implying that many of the values are near the lower end of the

range.

d) Conditions

The normal conditions for the test have been met, i.e., the sample was randomized and

descriptive statistics performed.

3. Hypothesis Test Calculations

a) Test Statistic (t)

Test statistic formula: sample mean minus target mean then divided by standard

deviation.

= [(354,612 – 288,407)] / (142793.71) = 10.367307;

This means that the standard errors for the Mountain region’s sample mean is

approximately 10 times below the target.

b) Probability (p - value)

p - value formula: T.DIST([test statistic], [degree of freedom], True).

= T.DIST([10.367307],499,1 ) = 1.0

Figure 4: 1-Tail test calculations

4. Interpretation

a) p value and significance level relation:

As shown in Figure 4 above, the p-value is 1.0 whereas the level of significance is

0.05. Thus, the p value is greater than the level of significance.

Regional vs. National Housing Comparison Report 6

b) Decision:

Decision: We fail to reject the null hypothesis.

The purpose of conducting a hypothesis test is to either reject or fail to reject the null

hypothesis to support the assumption based on the data. In this hypothesis test, the

null hypothesis is that the average listing price for the Mountain region equals the

national market listing price. However, the hypothesis test calculation shows that the

p-value is greater than the level of significance, which means that we fail to reject the

null hypothesis. Similarly, this does not mean that we accept the alternative

hypothesis, i.e., the average listing price for houses in the Mountain region is lower

than the national market pricing.

c) Test Conclusion:

The hypothesis test fails to reject the null hypothesis and does not accept the

alternative hypothesis. In the context of the scenario, it means that the average listing

price for houses in the Mountain region is neither equal nor is it lower than the

national market listing price. Furthermore, the test statistic, as shown in Figure 4, is a

positive number, based on how the average listing price for the Mountain region is

higher than the national average ($354,612 and $288,407 respectively). Therefore,

the remaining assumption based on the calculations is that the average listing price

for houses in the Mountain region is higher than the national market listing price.
Regional vs. National Housing Comparison Report 7

2-Tail Test

1. Hypotheses

a) Population Parameter:

Population parameter being tested is the average square feet for houses in the

Mountain region.

b) Hypotheses:

The hypothesis test is for average square footage, i.e., whether it is higher or lower

than the national average statistics. For the test, u represents the average square foot

for houses.

 Null hypothesis (Ho): u = $288,407. This means that the average square feet for

houses in the Mountain region equals the national market square footage.

 Alternative hypothesis (Ha): u ≠ $288,407. This means that the average square

feet for houses in the Mountain region is not equal to the national market average

pricing.

c) Significance level: 0.05

2. Data Analysis

a) Data Sample Histogram

Figure 5: Histogram for Mountain region average house square feet

Regional vs. National Housing Comparison Report 8

b) Summary Statistics

Figure 6: Descriptive statistics for square feet variable

c) Sample Data Summary

Figure 7: National listing price histogram

As shown in Figure 7 above, the shape of the histogram for the national square feet is

symmetric and the data set demonstrates a normal distribution since it is not skewed

to the right or left. In comparison, the histogram for the Mountain’s region sample
Regional vs. National Housing Comparison Report 9

(see Figure 5) is symmetric as well, but the dataset is positive skewed, i.e., the tail

pulls to the right. The difference between the two is that many of the values in the

National dataset are in the middle, whereas in the Mountain region dataset they are

near the lower end of the range.

d) Conditions:

The normal conditions for the test have been met, i.e., the sample was randomized and

descriptive statistics performed.

3. Hypothesis Test Calculations:

a) Test Statistic (t)

Test statistic formula: sample mean minus target mean then divided by standard

deviation.

= [(2,293 – 1,944)] / (522.6557871) = 14.94;

This means that the standard errors for the Mountain region’s sample mean is

approximately 14 times below the target.

b) Probability (p - value)

p - value formula: T.DIST([test statistic], [degree of freedom], True).

= T.DIST([14.94],499,2T ) = 5.59

Figure 8: 2-Tail test calculations

Regional vs. National Housing Comparison Report 10

4. Interpretation

a) p value and significance level relation:

As shown in Figure 8, the p-value is approximately 5.59 whereas the level of

significance is 0.05. Thus, the p value is greater than the level of significance.

b) Decision:

Decision: We fail to reject the null hypothesis.

In this hypothesis test, the null hypothesis is that the average square feet for the

Mountain region equals the national market square footage. However, the hypothesis

test calculation shows that the p-value is greater than the level of significance, which

means that we fail to reject the null hypothesis. Additionally, we do not accept the

alternative hypothesis, i.e., the average listing price for houses in the Mountain

region is not equal to the national market pricing.

c) Test Conclusion:

The hypothesis test fails to reject the null hypothesis and does not accept the

alternative hypothesis. In the context of the scenario, it means that the average square

feet for houses in the Mountain region is not equal to national market square footage.

Furthermore, the test statistic, as shown in Figure 8, is a positive number, based on

how the average listing price for the Mountain region is higher than the national

average 2,293sqft. and $1,944sqft. respectively). Therefore, the conclusion is that the

average square feet for houses in the Mountain region is different than the national

market listing price.

5. Comparison of the Test Results:

Figure 9 below shows the calculations of the 95% confidence interval. The calculation

for the confidence interval is the sample mean plus or minus the margin of error. The lower
Regional vs. National Housing Comparison Report 11

bound is the sample mean minus the margin of error. The upper bound is the sample mean

plus the margin of error. Thus, the 95% confidence interval is 2,249 and 2,341 sq. ft.

Figure 9: Square feet confidence interval

Therefore, we are 95% confident that the average square footage for the Mountain region is

between 2,249 and 2,341 sq. ft.

Final Conclusions

The report has provided a comprehensive analysis regarding how the regional real

estate company can determine whether the Mountain region’s houses listing prices and square

footage re significantly different from the national market. Firstly, the 1-tail test led to the

conclusion that the housing prices for the Mountain region is not lower than the national

market average. In other words, property in the Mountain region costs more per square feet as

compared to the national statistics. Secondly, the 2-tail test led to the conclusion that the

square footage for homes in the Mountain region is significantly different than the average

square footage for homes in the national market.