2. In an analysis on the sale prices of condominium units near an ocean, the fol

Question

2. In an analysis on the sale prices of condominium units near an ocean, the following variables were measured: Y. sale price in thousands of dollars; zil floor height (1,2 ,8); ari2 distance from elevator in feet; zi3 dummy variable representing condominiums which have an ocean view (zi3 1 and those that do not (zi3 0); ai dummy variable representing condominums which are end-units (zi4 1) and those that are not (zi4 0). Based on n 106 observations, the following three models were fit: Model II: Bo B il 12 Model III: Y Bo Bizil B2zi2 B3 ria BAzid B13ailzi3 You are given that the total sum of squares is SYY 33,436 and the sum of squared residuals are SSE(I 9974, SSE(II) 9004 and SSE(III) 9028 for Models I, II and III, respectively. a) Fill in the ANOVA table for Model I, and test the hypothesis that this model is useful at a 0.05. given that F4,101,0.95 2.4. Give the value of R2 for this model and its interpretation. Source MS SS Regression Residual Total

Explanation / Answer

Model I:yI=B0+B1xi+B2XI2+B3xi3+B4xi4+ei

SYY=33436

SSE=9974

SSR=33436-9974=23462

TOTAL 33436 105

Tabulated value of F AT5% SIGNIFICANCE LEVEL FOR 4,101D.F =2.4 which is less than calculated value,Hence we reject null hypothesis at5% significance level.

similarly for model II

SYY=33436

SSE=9004

SSR=33436-9004=24432

F tabulated value for 3,98d.f at5% significance level is=2.7which is less than calculated value hence we reject null hypothesis

SOURCE SS D.F M.S. F RATIO REGRESSION 23436 4 23436/4=5859 5859/98.75=59.33 RESIDUAL 9974 101 9974/101=98.75

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