A realtor in Arlington, Massachusetts, is analyzing the relationship between the
ID: 3220350 • Letter: A
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 is shown in the accompanying table.
Price
Sqft
Beds
Baths
728,000
2,399
4
2.5
569,077
1,731
3
1.5
831,833
2,800
4
3.0
689,000
2,200
3
2.5
685,000
2,716
3
3.5
838,500
3,281
4
2.5
625,000
2,732
4
2.5
620,000
2,436
4
3.5
587,500
2,100
3
1.5
585,000
1,947
3
1.5
795,000
3,033
4
3.5
379,333
2,175
3
1.0
764,400
2,509
4
3.0
540,000
1,488
3
1.5
732,273
3,964
4
3.5
344,000
1,301
3
1.0
511,000
1,752
3
1.5
714,000
2,418
4
3.0
495,000
1,692
3
2.0
463,000
1,714
3
2.0
639,800
2,310
4
3.0
631,400
2,359
4
3.0
435,000
1,500
3
1.5
431,700
1,896
2
1.5
414,000
1,182
2
1.5
602,250
1,728
4
2.0
478,800
1,660
4
2.0
253,333
896
3
1.0
285,000
954
2
1.0
375,900
2,275
5
1.0
372,000
1,005
2
1.0
459,375
1,590
3
2.0
534,750
2,147
3
3.0
412,500
1,703
3
2.0
247,500
1,099
2
1.0
307,500
850
1
1.0
SOURCE: http://Newenglandmoves.com.
Estimate the model Price = 0 + 1Sqft + 2Beds + 3Baths + . (Round Coefficients and Standard Error answers to 2 decimal places. Round t Stat and p-value answers to 4 decimal places.)
Predict the price of a 2,078-square-foot home with two bedrooms and one bathrooms. (Round intermediate coefficient values to 2 decimal places. Round your answer to 2 decimal places.)
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 is shown in the accompanying table.
Explanation / Answer
Coefficients
Standard Error
t Stat
P-value
Intercept
1,11,454.76
54,196.93
2.0565
0.0480
Sqft
107.67
36.20
2.9745
0.0055
Beds
13,699.54
23,008.30
0.5954
0.5558
Baths
82,074.78
25,782.06
3.1834
0.0032
b-1) Ans: b
For every additional square foot, the predicted price of a home increases by $107.67, holding number of bedrooms and bathrooms constant.
b-2) Ans: b
For every additional bedroom, the predicted price of a home increases by $13,699.54, holding number of square feet and bathrooms constant.
b-3) And: b
For every additional bathroom, the predicted price of a home increases by $82,074.78, holding number of square feet and bedrooms constant.
c) The Regression equation is:
Price = 111454.76 + 107.67 * Sqft + 13699.54*Beds + 82074.78 * Baths
For ,Sqft = 2078 ,Beds = 2 and Baths = 1 , the above equation results in
Price = 111454.76 + 107.67 * 2078 + 13699.54*2 + 82074.78 * 1 = $ 4,44,659.48
Coefficients
Standard Error
t Stat
P-value
Intercept
1,11,454.76
54,196.93
2.0565
0.0480
Sqft
107.67
36.20
2.9745
0.0055
Beds
13,699.54
23,008.30
0.5954
0.5558
Baths
82,074.78
25,782.06
3.1834
0.0032
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