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t provides you with data on a local housing what housing characteristics contrib

ID: 3061883 • Letter: T

Question

t provides you with data on a local housing what housing characteristics contribute positively to housing prices. You market. The elient is interested in investigate the data and find the following descriptive statistics: Max Variable Mean td. Dev. Obs Min 750000 89900 756 price l sqft I bedrooms I baths I 83 451712.8 212274.5 83 2118.313 929.4604 83 3.566265 1.072867 83 2.4384 15 .8811923 4400 5.5 600000 Price If your client wants to relate price to square footage, bedrooms, and bathrooms, what kind of estimator would you recommend? Explain. (c) Suppose your clieut wants to relate the number of bedrooms to the square footage, and bath- rooms. What kind of estimator would you use in this exercise? Explain

Explanation / Answer

b)

In this case, we can use linear regression and the dependent variable would be price with independent variables being square footage, bedrooms and bathrooms. This would predict the variability in price based on the variability in square footage, bedrooms and bathrooms.

c)

In this case, we can use linear regression and the dependent variable would be number of bedrooms with independent variables being square footage and bathrooms. This would predict the variability in number of bedrooms based on the variability in square footage and bathrooms.