This hypothesis testing is to try to understand if there is correlation between the average scores given by wine spectator and the average prices for wineries in Sonoma.
Step 1: Define the Hypothesis
Ho: There is no correlation between WS score and Price for Sonoma wines
H1: there is a correlation between WS score and price for Sonoma wines
Step 2 run the regression Analysis
The regression equation is
Sonoma Price = - 389 + 4.78 Sonoma Score
Predictor Coef StDev T P
Constant -388.5 106.2 -3.66 0.001
Sonoma S 4.783 1.185 4.04 0.000
S = 9.461 R-Sq = 32.4% R-Sq(adj) = 30.4%
Analysis of Variance
Source DF SS MS F P
Regression 1 1458.3 1458.3 16.29 0.000
Residual Error 34 3043.3 89.5
Total 35 4501.6
Step 3 Explain the results
We reject the null hypothesis.
The P-value for Score is <.05 which leads us to conclude that score is a good predictor of Price and there is correlation between Score and Price for Sonoma wines.
The R-sq(adj) value is low, which tells us that the regression equation can only explains about 30% of the variation, we therefore conclude that there are other factors that can explain variation.
Step 4 Conclusion
There is a correlation between scores and prices other factors are at play.
Note:"Correlation does not imply causation"