Confidence interval for the expected value

Reference no: EM131798723

The homeownership rate in the U.S. was 67.4% in 2009. In order to determine if homeownership is linked with income, 2009 state level data on the homeownership rate (Ownership) and median household income (Income) were collected. A portion of the data is shown below; the complete data can be found on the text website, labeled Home Ownership.

957_homeownership is linked with income.png

a. Estimate: Ownership = β₀ + β₁ Income + ε.

b. At the 5% significance level, is Income linearly related to Ownership? Show the steps of a hypothesis test using the critical value approach.

c. Construct a 95% confidence interval for the expected value of Ownership if Income is $50,000.

d. Compare the above confidence interval with a 95% prediction interval for Ownership.

Reference no: EM131798723

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