Property Prices in the UK Coursework Example | Topics and Well Written Essays - 500 words

Property Prices in the UK - Coursework Example Our null hypothesis and alternative hypothesis were as follows:H0: ÃŽ ¼w = ÃŽ ¼l (No significant difference in the two means) H1: ÃŽ ¼w ≠  ÃŽ ¼l (A significant difference exist between the two means)A t-test was used to ascertain whether the price data vary vastly, with regard to our assertion or it is steady. We opted for a t-test because, according to Dalgaard (2008), it is best suited for this work and it is easy to interpret. From the results of two sample, t-statistics tells how the mean of one population sample deviates from the mean of another population sample. It interprets the average of each property price and the mean difference between the two property sits. Moreover, t-test gives an explanation as to whether the difference in mean is statistically significant or not especially if the two populations, where the sample prices were gathered, have similar means.      We tabulated the sample prices for property news (sample w) and the sample prices for property live and then calculated the relevant summary statistics using STATA.  The variance of difference for the two means (sd2) was calculated as follows:sd2 = (sw2 / nw) + (sl2 / nl) = (108370.3/8) + (108725.4/7)  = 13546.29 +15532.2 sd2 = 29078.49 Therefore, sd = √29078.49 = 170.52 Our calculated t-statistics was therefore given as:  t = (ÃŽ ¼w – ÃŽ ¼l)/ sd = (85731 - 73329.71)/ 170.52 = 72.73 However, the tabulated t-value, at 13 degrees of freedom (8 + 7 -2) is given as 1.7709. Since the calculated t-statistics > the tabulated t-statistics, we reject Ho and conclude that the two means for the two property prices are significantly different at 5% significance level.