The homeownership rate in the U.S. was 67.4% in 2009. In order to determine if homeownership is linked with income, 2009 state level data on the homeownership rate (Ownership) and median household income (Income) were collected. A portion of the data is shown in the accompanying table.

State                Income            Ownership

Alabama………39980…………..74.1%

Alaska………...61604…………..66.8%

   ⋮…………………….⋮…………………⋮

Wyoming……..52470…………...73.8%

a. Estimate: Ownership = β0 + β1Income + ε.

b. At the 5% significance level, is Income linearly related to Ownership? Show the steps of a hypothesis test using the critical value approach.

c. Construct the 95% confidence interval for the expected value of Ownership if Income is $50,000.

d. Compare the above confidence interval with the 95% prediction interval for Ownership.