Below is some of the regression output from a regression of the amount rental ho

Question

Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of exist's) based on the size of the house (expressed in square feet), whether the house has an ocean front view (VIEW = 1 if it has an ocean front view and = 0 if not), and an interaction term between the ocean front view dummy variable and the size of the house. If the estimated equation is Price = 1, 474 + 0.31 * Size + 1, 885 * View + 0.1 * (Size * View) How much more (or less) does a 3900 square foot house that has an ocean front view rent for compared to a similar sized house without an ocean front view? (if the ocean front house rents for more then express your answer as a POSITIVE number: if the ocean front house rents for less then express your answer as a NEGATIVE number) (please express your answer using 1 decimal places)

Explanation / Answer

first case

size = 3900 View = 1

1.474+0.31*3900+1.885*1+0.1*(3900*1)

=1602.359

when View = 0

1.474+0.31*3900+1.885*0+0.1*(3900*0)

= 1210.474

hence difference

= 1602.359 -1210.474

=391.885

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