An important component of the cost of living is the amount of money spent on housing. Housing costs include rent (for tenants), mortgage payments and property tax (for home owners), heating, electricity, and water. An economist undertook a 5-year study to determine how housing costs have changed. Five years ago, he took a random sample of 200 households and recorded the percentage of total income spent on housing. This year, he took another sample of 200 households.
a. Conduct a test (with α = .10) to determine whether the economist can infer that housing cost as a percentage of total income has increased over the last 5 years.
b. Use whatever statistical method you deem appropriate to check the required condition(s) of the test used in part (a).

  • CreatedFebruary 03, 2015
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