Problem 6-7. A car dealer s investigating what drives a car resale value. Result

Question

Problem 6-7. A car dealer s investigating what drives a car resale value. Results from a regression are shown in table below. The variable Sport is a dummy 1 if a sport car, zero otherwise. The interpretation for the coefficient of the variable Sport is.... Coefficients Unstandardized Standardized CoefficientsCoefficients Model Sig Std. Beta Error (Constant) 42.554 3562 SuggestedPrice .000 Sport a. Dependent variable: 11.947 000 1.897 069 3.660 001 000 270 7.917 2163 567 car resale value (thousand $)

Explanation / Answer

The coefficient of sport given here is 7.917 Now as sport is a binary dummy variable and it has a positive coefficient , therefore this means that the resale value is 7.917 thousand dollars higher for a sports car than the case when it is not a sports car.

Therefore a is the correct answer here.

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