A real estate developer wishes to study the relationship between the size of hom

Question

A real estate developer wishes to study the relationship between the size of home a client will purchase (in square feet) and other variables. Possible independent variables include the family income, family size, whether there is a senior adult parent living with the family (1 for yes, 0 for no), and the total years of education beyond high school for the husband and wife. The sample information is reported below.

a.

Develop an appropriate multiple regression equation using stepwise method. (Use excel data analysis and enter number of family members first, then their income and delete any insignificant variables. Round P-value to 3 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Round the Constant, Income values to 1 decimal place and T-value, R2, R2(adj) to 2 decimal places.)

b.

Family Square Feet Income (000s) Family Size Senior Parent Education 1 2,788 63.2 1 0 4 2 2,380 68.4 2 1 6 3 3,874 104.5 3 0 7 4 3,145 78.6 1 1 0 5 3,255 93.4 5 0 2 6 2,618 114 3 1 10 7 4,480 125.4 6 0 6 8 2,520 83.6 3 0 8 9 4,200 133 5 0 2 10 2,800 95 3 0 6

Explanation / Answer

a)

b)

when every independent variable is considered .

if p-value is less than (level of significance), the variable is significant

here

Family size and Senior Parent have hign p-value ,so they can be removed from model

SUMMARY OUTPUT Regression Statistics Multiple R 0.759030342 R Square 0.576127061 Adjusted R Square 0.455020506 Standard Error 544.8027181 Observations 10 ANOVA df SS MS F Significance F Regression 2 2823963.988 1411981.994 4.757191422 0.0495821 Residual 7 2077670.012 296810.0017 Total 9 4901634 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 1214.301652 873.35167 1.390392546 0.207013438 -850.8468874 ## Income (000s) 17.09518106 13.00638467 1.314368404 0.230149711 -13.66003156 48 Family Size 110.0311042 180.5186693 0.609527561 0.561429536 -316.827719 ##

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