6-3 Discussion: Confidence Intervals
Week 6 Discussion Board
Posted Feb 7, 2021 6:22 PM
The B&K Real Estate Company sells homes and is currently serving the Southeast region. It has recently expanded to cover the Northeast states. The B&K realtors are excited to now cover the entire East Coast and are working to prepare their southern agents to expand their reach to the Northeast.
B&K has hired your company to analyze the Northeast home listing prices in order to give information to their agents about the mean listing price at 95% confidence. Your company offers two analysis packages: one based on a sample size of 100 listings, and another based on a sample size of 1,000 listings. Because there is an additional cost for data collection, your company charges more for the package with 1,000 listings than for the package with 100 listings.
Sample size of 100 listings:
95% confidence interval for the mean of the Northeast house listing price has a margin of error of $25,000
Cost for service to B&K: $2,000
Sample size of 1,000 listings:
95% confidence interval for the mean of the Northeast house listing price has a margin of error of $8,000
Cost for service to B&K: $10,000
The B&K management team does not understand the tradeoff between confidence level, sample size, and margin of error. B&K would like you to come back with your recommendation of the sample size that would provide the sales agents with the best understanding of northeast home prices at the lowest cost for service to B&K.
In other words, which option is preferable?
Spending more on data collection and having a smaller margin of error
Spending less on data collection and having a larger margin of error
Choosing an option somewhere in the middle
For your initial post:
Formulate a recommendation and write a confidence statement in the context of this scenario. For the purposes of writing your confidence statement, assume the sample mean house listing price is $310,000 for both packages. “I am [#] % confident the true mean . . . [in context].”
Explain the factors that went into your recommendation, including a discussion of the margin of error
For your response posts to your peers, choose two different confidence intervals for your responses. Do you think the agents would prefer a different confidence interval than their management? What advantages and disadvantages would there be in having different confidence intervals for the agents? Explain your thought process and reasoning in your response.
Hello Class & Welcome to Module 6,
Welcome to the fifth week of the class! We have successfully finished Module 5 and I have started grading the assignments in zyBooks and the Means: Test of Hypothesis (1-Sample).
Last week we expanded our knowledge by working with identifying the problem being solved and the variable being studied, expressing the problem being solved in a hypothesis testing framework using the null and alternative hypotheses, graphing the rejection region for one-tailed and two-tailed tests, using the p value method to reject or not reject the null hypothesis, and applying the conclusions of a hypothesis test to the original problem being solved.
This week you will be studying Module 6 and learning about identifying the problem being solved and the variable being studied, expressing the problem being solved in a confidence interval framework, interpreting different levels of confidence and the margin of error, and applying the conclusions of a confidence interval calculation to the original problem being solved.
Assignments due at the end of this week:
Complete the participation activities in zyBooks.
Complete the challenge activities in zyBooks.
Submit your initial discussion post with follow up responses to at least two peers in the discussion.
Discussion Forum – Confidence Intervals
The Discussion postings this week should be on applications of confidence intervals. Your interaction with the instructor and other online students in this forum can help you to gain better knowledge and understanding about statistical concepts and related assignments.
