Name: Description Nearly 60% of the houses in Saratoga County New York have fireplaces. On average, those houses sell for more than houses without fireplaces. The goal of this project is to answer the question: Is the fireplace the reason for the difference? Resources Required Data: The data set consists of a random sample of 1728 homes in Saratoga County, NY taken from public records. The data file is available through Blackboard. Computer Resource: Microsoft Excel. This project attempts to answer the question “Do fireplaces increase the selling price of a house?” The variables in the file are as follows: Price (in dollars) Lot size (in acres) Waterfront? (0 = no, 1 = yes)

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Name:
Description
Nearly 60% of the houses in Saratoga County New York have fireplaces. On average, those houses sell for more than houses without fireplaces. The goal of this project is to answer the question: Is the fireplace the reason for the difference?
Resources Required
Data: The data set consists of a random sample of 1728 homes in Saratoga County, NY taken from public records. The data file is available through Blackboard.
Computer Resource: Microsoft Excel.
This project attempts to answer the question “Do fireplaces increase the selling price of a house?”
The variables in the file are as follows:
Price (in dollars)
Lot size (in acres)
Waterfront? (0 = no, 1 = yes)
Age (in years)
Land value (in dollars)
New Construction? (0 = no, 1 = yes)
Central Air? (0 = no, 1 = yes)
Fuel Type? (2 = gas, 3 = electric, 4= oil)
Heat Type? (2 = hot air, 3= hot water, 4 = electric)
Sewer Type? (1 = none, 2 = private, 3 = public)
Living Area (in square feet)
Bedrooms, number of
Bathrooms, number of
Rooms, number of
Fireplace (0 = no, 1 = yes)

Inference [150 points]
It has been hypothesized that houses with fireplaces are larger than houses without fireplaces.
1. [25 points, 12.5 per bound] Create a 95% confidence interval for living area (sq. ft.) of houses with fireplaces:
Lower Bound:________ Upper Bound:________

2. [10 points] What does this 95% confidence interval tell you about the living area of houses with fireplaces?

3. [25 points, 12.5 per bound] Create a 95% confidence interval for living area (sq. ft.) of houses without fireplaces:
Lower Bound:________ Upper Bound:________

4. [10 points] What does this 95% confidence interval tell you about the living area of houses without fireplaces?

5. [10 points, 5 for reasoning] Do you believe that houses with fireplaces are larger than houses without fireplaces based on these confidence intervals? Explain your reasoning.

6. Perform a hypothesis test at the α = .05 significance level to test the claim that houses with fireplaces have more living area (in square footage) than houses without fireplaces.
a. [20 points, 10 each] Write the hypotheses:

H0:________________________
H1:_________________________

b. [10 points] What is the value of your test statistic?

c. [10 points] What is your P-value?

d. [10 points] Do you reject the null hypothesis or fail to reject the null hypothesis at the α = .05 significance level?

e. [20 points] Do you believe that houses with fireplaces are larger than houses without fireplaces based on the outcome of this hypothesis test? Explain your reasoning.

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