A bank employs two appraisers. When approving borrowers for mortgages, it is imperative that the appraisers value the same types of properties consistently. To make sure that this is the case, the bank examines six properties (in $1,000s) that the appraisers had valued recently.
a. Specify the competing hypotheses that determine whether there is any difference between the values estimated by Appraiser 1 and Appraiser 2.
b. Assuming that the value difference is normally distributed, calculate the value of the test statistic.
c. Find the p-value.
d. At the 5% significance level, is there sufficient evidence to conclude that the appraisers are inconsistent in their estimates? Explain.
