A broker compared the mean rents for two-bedroom apartments in two cities to see

Question

A broker compared the mean rents for two-bedroom apartments in two cities to see if there was any difference between them. He obtained the following information:

                                                Chicago                       St. Louis

            Mean rent                   $2,000                         $1,800

            Standard deviation     $   400                         $ 350

            n                                  18                                16

Standard error = 129.67

What is the rejection region, using a significance level of 0.05?

Explanation / Answer

Assuming equal variances,

Degrees of freedom = n1 + n2 - 2 = 18 + 16 - 2 = 32

Hence,

For 32 degrees of freedom and 0.05 significance level, two tailed critical values will be:

Critical t = -2.037, 2.037

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