Question 2 (10.14 a-c): Refer to the previous exercise. Use the attached HOMESAL

Question

Question 2 (10.14 a-c): Refer to the previous exercise. Use the attached HOMESALES file.

a) Calculate the predicted selling price for homes currently assessed at $155000, $220000 and $285000.

b) Suppose these houses sold for $142900, $224000 and $286000 respectively. Calculate residuals for each of these sales.

c) Construct a 95% confidence interval for both the slope and the intercept.

DATA:

Sales Price Assessed Value 167.9 152.7 168 163.8 155 167.6 158.5 127.3 159.9 155.7 162 169 165 187.1 174.5 153.6 175 167.1 159 148.9 230 225.4 230 170.4 222.5 200.4 225.5 209.6 220 205.2 216 220.9 215 194.9 228 231.4 209 224.2 267 235.1 283 303.9 269 233.7 255 233.6 285 234.2 146 145.1 128 108.3 126.5 136.2 129.9 113.3 150 121.4 195 184

Explanation / Answer

output of regression analysis of given data is

(a)

Regression line, ycap = 21.5 + 0.9468x

b)

c)

Intercept CI - (-9.7991, 52.7976)
Slope CI - (0.7816, 1.112)

SUMMARY OUTPUT Regression Statistics Multiple R 0.911688604 R Square 0.83117611 Adjusted R Square 0.825146685 Standard Error 19.72790888 Observations 30 ANOVA df SS MS F Significance F Regression 1 53651.18112 53651.18112 137.8533044 2.48781E-12 Residual 28 10897.33088 389.1903886 Total 29 64548.512 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 21.49923177 15.2793608 1.407076647 0.170408603 -9.799120013 52.79758354 -9.799120013 52.79758354 Assessed Value 0.946818075 0.08064138 11.74109469 2.48781E-12 0.781631697 1.112004453 0.781631697 1.112004453

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