A realtor in Arlington, Massachusetts, is analyzing the relationship between the

Question

A realtor in Arlington, Massachusetts, is analyzing the relationship between the sale price of a home (Price), its square footage (Sqft), the number of bedrooms (Beds), and the number of bathrooms (Baths). She collects data on 36 recent sales in Arlington in the first quarter of 2009 for the analysis. The data set can be found on the text website, labeled Arlington Homes. She estimates the model as Price = beta_0 + beta_1 Sqft + beta_2 Beds + beta_3 Baths + and obtains the following output. b. b. Interpret the coefficient of sqft. For every additional square foot, the predicted price of a home increases by $127.70. For every additional square foot, the predicted price of a home increases by $127.70, holding square foot, number of bedrooms and bathrooms constant. For every additional square foot, the predicted price of a home increases by $127.70, holding number of bedrooms and bathrooms constant.c. Predict the price of a 2,382 square-foot home with three bedrooms and two bathrooms.

Explanation / Answer

b.)

As the coefficient of sqft is 127.70, then for every 1 unit increase in sqft, we epect 127.70 increase in price, holding the other variables constant.

Hence, OPTION C. [ANSWER, C]

*********************************

c)

As

price^ = 22155.45 + 127.70*sqft + 23271.30*beds + 94285.19baths

then if sqft = 2382, beds = 3, baths = 2, then

price^ = 22155.45 + 127.70*2382 + 23271.30*3 + 94285.19*2 = 584721.13 [ANSWER]

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.