Contingent valuation of homes in contaminated areas. Contingent valuation (CV) is a method of estimating property values that uses survey responses from potential homeowners. CV surveys were employed to determine the impact of contamination on property values in the Journal of Real Estate Research (Vol. 27, 2005). Homeowners were randomly selected from each of seven states—Kentucky, Pennsylvania, Ohio, Alabama, Illinois, South Carolina, and Texas. Each homeowner was asked to estimate the property value of a home located in an area contaminated by petroleum leaking from underground storage tanks (LUST). The dependent variable of interest was the LUST discount percentage (i.e., the difference between the current home value and estimated LUST value, as a percentage). The researchers were interested in comparing the mean LUST discount percentages across the seven states.

a. Give the null and alternative hypotheses of interest to the researchers.

b. An ANOVA summary table is shown below. Use the information provided to conduct the hypothesis test, part a. Use  = .10.

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