A local real estate developer wishes to study the relationship between the size

Question

A local 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 contained in the file RealEstateChapter14.

Mr. Robert Bostick is a real estate broker who asked you to produce a model to predict the square footage a potential buyer would purchase. Based on the data in the file RealEstateChapter14, is the overall regression model significant if ? = 0.05?

Write a memorandum to Mr. Bostick explaining if the model is significant and if so, which variables make a difference in the size of home a client might purchase.

Please do calculations in excel. If the answer is clear and complete I will up the bonus points.

Thanks.

Real Estate Family Square Feet Income (000s) Family Size Senior Parent Education 1 2,771 46.9 3 0 4 2 2,380 68.4 2 1 6 3 3,283 104.5 3 0 7 4 3,119 94.1 3 1 0 5 3,217 50.6 3 0 2 6 2,595 114 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

Using Excel follow the steps mentioned below:

1. Enter the data in worksheet.

Click Data> Data analysis > Regression.

Let:

The obtained output is,

The smallest P-value of 0.019 suggests that there is relationship between square feet and family size. So, the P-values greater than 0.05 is not usefull for the model.

Variables Dependent Independent Square Feet Income (000s) Family Size Senior Parent Education

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