Question: 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 evaluates six properties that the appraisers had valued recently.
a. Specify the competing hypotheses that determine whether there is any difference between the average values estimated by appraiser 1 and appraiser 2.
b. Assuming that the difference is normally distributed, calculate the appropriate value of the test statistic.
c. Is there sufficient evidence to conclude at the 5% significance level that the appraisers are inconsistent in their estimates? Explain.