Question

1. You are a member of your local apartment association. The association represents rental housing owners and managers who operate residential rental property throughout the greater metropolitan area.  Recently, the association has received several complaints from tenants in a particular area of the city who feel that their monthly rental fees are much higher than other parts of the city.

You want to investigate the rental fees.  You gather the data shown in the table below.  Area A represents the area of the city where tenants are unhappy about their monthly rents.  The data represent the monthly rents paid by a random sample of tenants in Area A and three other areas of similar size.  Assume all the apartments represented are approximately the same size with the same amenities.

Area A	Area B	Area C	Area D
1275	1124	1085	928
1110	954	827	1096
975	815	793	862
862	1078	1170	735
1040	843	919	798
997	745	943	812
1119	796	756	1232
908	816	765	1036
890	938	809	998
1055	1082	1020	914
860	750	710	1005
975	703	775	930

1. Which statistical measure(s) do you think would best represent the data sets for the four areas of the city?
2. Calculate the measure(s) for all 4 sets of the data.
3. Are there graphs that could help you decide?
4. Do you think the complaints in Area A are legitimate?  How do you think they should be addressed?
5. What are some of the reasons the rents may vary among different areas in the city?

Answer 1

Solution :

a)

For measure of central tendency we use mean as a best measure and standard deviation is the best measure for measures of dispersion for this data set.

b)

Area	A	B	C	D
Mean	1005.5	887	881	945.5
Standard Deviation	123.0724	144.9125	146.2091	138.7014

c)

Yes. We can draw mean-sd chart for explaination:

d)

Area	A	B	C	D
Mean	1005.5	887	881	945.5
Standard Deviation	123.0724	144.9125	146.2091	138.7014
CV(%)	0.12	0.16	0.17	0.15

Since mean of Area A is largest and CV (coefficient of variation) of Area is smallest so the complaints in Area A are legitimate.

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