The average value of land and buildings per acre, based on our sample from the farm, is calculated to be $1,500. This figure represents the mean, which is the central point of our data set. In simpler terms, if you were to take several samples of land and buildings from this farm and calculate their values, the average value of an acre would settle around $1,500.
Alongside the mean, we also take into consideration the standard deviation, which in this case is $200. The standard deviation is a measure of how spread out the values are in our sample. A smaller standard deviation suggests that the values are closer to the mean, while a larger one indicates that there is more variability or spread in the values.
In this context, a standard deviation of $200 indicates that most of the values for land and building per acre fall within $200 of the mean. This means that somewhere between $1,300 and $1,700, you will likely find the value of the majority of the agricultural land and buildings per acre on this farm. Understanding both the mean and the standard deviation helps investors, farmers, and stakeholders to gauge the economic landscape more effectively and make informed decisions.
Overall, this information is crucial for anyone involved in real estate or agriculture, as it not only provides insights into current values but also the degree of confidence one can have in those numbers. By analyzing the mean and the variability together, it becomes possible to assess both the average market rate and the risk involved in investment decisions related to farmland.