Concept explainers
The American Housing Survey reported the following data on the number of bedrooms in owner-occupied and renter-occupied houses in central cities (U.S. Census Bureau website, March 31, 2003).
Number of Houses (1000s) | ||
Bedrooms | Renter-Occupied | Owner-Occupied |
0 | 547 | 23 |
1 | 5012 | 541 |
2 | 6100 | 3832 |
3 | 2644 | 8690 |
4 or more | 557 | 3783 |
- a. Define a random variable x = number of bedrooms in renter-occupied houses and develop a probability distribution for the random variable. (Let x = 4 represent 4 or more bedrooms.)
- b. Compute the expected value and variance for the number of bedrooms in renter-occupied houses.
- c. Define a random variable y = number of bedrooms in owner-occupied houses and develop a probability distribution for the random variable. (Let y = 4 represent 4 or more bedrooms.)
- d. Compute the expected value and variance for the number of bedrooms in owner-occupied houses.
- e. What observations can you make from a comparison of the number of bedrooms in renter-occupied versus owner-occupied homes?
a.
Construct a discrete probability distribution for the random variable x.
Answer to Problem 18E
The probability distribution for the random variable x is given by,
x | f(x) |
0 | 0.04 |
1 | 0.34 |
2 | 0.41 |
3 | 0.18 |
4 | 0.04 |
Explanation of Solution
Calculation:
The data represents the number of bedrooms in owner-occupied and renter-occupied houses. The random variable x is the number of bedrooms inrenter-occupied houses.
The corresponding probabilities of the random variable x are obtained by dividing the number of houses that are renter occupied (f) with totalnumber of houses (N) that are renter occupied.
That is,
For example,
The probability distribution for the random variable x can be obtained as follows:
x | f | f(x) |
0 | 547 | 0.04 |
1 | 5,012 | 0.34 |
2 | 6,100 | 0.41 |
3 | 2,644 | 0.18 |
4 | 557 | 0.04 |
Total | 14,860 | 1.00 |
Thus, a discrete probability distribution for the random variable x is obtained.
b.
Compute the expected value and variance for the random variable x.
Answer to Problem 18E
The expected value for the random variable x is1.84.
The variance of the random variable x is 0.79.
Explanation of Solution
Calculation:
The formula for the expected value of a discrete random variable is,
The formula for the variance of the discrete random variable is,
The expected value and variance for the random variable x is obtained using the following table:
x | f(x) | |||||
0 | 0.04 | 0.00 | –1.84 | 3.39 | 0.12 | |
1 | 0.34 | 0.34 | –0.84 | 0.71 | 0.24 | |
2 | 0.41 | 0.82 | 0.16 | 0.02 | 0.01 | |
3 | 0.18 | 0.53 | 1.16 | 1.34 | 0.24 | |
4 | 0.04 | 0.15 | 2.16 | 4.66 | 0.17 | |
Total | 1.0000 | 1.84 | 0.79 |
Thus, the expected value for the random variable x is 1.84 and the variance of the random variable x is 0.79.
c.
Construct a discrete probability distribution for the random variable y.
Answer to Problem 18E
The probability distribution for the random variable y is given by,
y | f(y) |
0 | 0.00 |
1 | 0.03 |
2 | 0.23 |
3 | 0.52 |
4 | 0.22 |
Explanation of Solution
Calculation:
The given information is that the random variable y represents the number of bedrooms in owner-occupied houses.
The corresponding probabilities of the random variable y are obtained by dividing the number of houses that are owner occupied (f) with total number of houses(N) that are owner occupied.
That is,
For example,
The probability distribution for the random variable y can be obtained as follows:
y | f | f(y) |
0 | 23 | 0.00 |
1 | 541 | 0.03 |
2 | 3,832 | 0.23 |
3 | 8,690 | 0.52 |
4 | 3,783 | 0.22 |
Total | 16,869 | 1.00 |
Thus, a discrete probability distribution for the random variable y is obtained.
d.
Compute the expected value and variance for the random variable y.
Answer to Problem 18E
The expected value for the random variable y is 2.93.
The variance of the random variable y is 0.59.
Explanation of Solution
Calculation:
The formula for the expected value of a discrete random variable is,
The formula for the variance of the discrete random variable is,
The expected value and variance for the random variable y is obtained using the following table:
y | f(y) | |||||
0 | 0.00 | 0.00 | –2.93 | 8.58 | 0.01 | |
1 | 0.03 | 0.03 | –1.93 | 3.72 | 0.12 | |
2 | 0.23 | 0.45 | –0.93 | 0.86 | 0.20 | |
3 | 0.52 | 1.55 | 0.07 | 0.01 | 0.00 | |
4 | 0.22 | 0.90 | 1.07 | 1.15 | 0.26 | |
Total | 1.00 | 2.93 | 0.59 |
Thus, the expected value for the random variable y is 2.93 and the variance of the random variable y is 0.59.
e.
Explain the observations that can be made from a comparison of the number of bedrooms in renter occupied versus owner occupied homes.
Explanation of Solution
The expected number of bedrooms in renter-occupied houses is 1.84 and the expected number of bedrooms in owner-occupied houses is 2.93. Thus, the expected value is greater for the owner-occupied houses than the renter-occupied houses. The variability is less for the owner-occupied houses comparing to the renter-occupied houses.
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