A realtor in Arlington, Massachusetts, is analyzing the relationship between the

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 0 8 Price 840,000 2,768 822,000 2,500 713,000 2,400 689,000 2,200 685,000 2,716 645,000 2,524 625,000 2,732 620,000 2,436 587,500 2,100 585,000 1,947 583,000 2,22 569,000 3,262 546,000 1,792 540,000 1,488 537,000 2,907 516,000 1,951 511,000 1,752 510,000 1,727 495,000 1,692 463,000 1,714 457,000 1,650 451,000 1,685 435,000 1,500 431,700 1,896 414,000 1,182 401,500 1,152 399,000 1,383 380,000 1,344 380,000 1,272 375,900 2,275 372,000 1,005 367,500 1,272 356,500 1,431 330,000 1,362 330,000 1,465 307,500 Sqft Beds Baths 3.5 2.5 3.0 2.5 3.5 2.0 2.5 3.5 1.5 2.5 2.0 2.0 1.5 2.5 2.0 1.5 2.0 2.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 2.0 1.0 850 SOURCE: http://Newenglandmoves.com a. Estimate the model Price-Ao + ?,sqft + ?2Beds+ ßgBaths+ ? Coefficients Intercept Sqft Beds Baths 153348.27 95.86 556.89 92022.91

Explanation / Answer

(a) The coefficients are: (considering the answers are to given rounded to 2 decimal places) (I used Excel to solve this linear regression problem.)

Intercept = 154544.1343 = 154544.13.
Sqft = 96.5468 = 96.55.
Beds = 28.22998 = 28.23.
Baths = 91659.7952 = 91659.80.

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