Homeowners 2018 According to recent data collected by Eurostat regarding homeownership rates across Europe, in 2018, 42.5% of people in Switzerland own their homes, the lowest rate in Europe. A study conducted in a small town in Switzerland reveals that the ownership rate is much lower. The city council is debating a plan to offer tax breaks to first-time home buyers to encourage people to become homeowners. They decide to adopt the plan on a two-year trial basis and use the data they collect to make a decision about continuing the tax breaks. Since this plan costs the city tax revenues, they will continue to use it only if there is strong evidence that the rate of home ownership is increasing.

a) In words, what will their hypotheses be?

b) What would a Type I error be?

c) What would a Type II error be?

d) For each type of error, tell who would be harmed.

e) What would the power of the test represent in this context?

(https://tradingeconomics.com/european-union/home-ownershiprate;

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_ lvho02&lang=en)