Solution 1 A real estate study was conducted in the school district of Alhambra to determine what variables influenced the market price of a house denoted by
Solution A real estate study was conducted in the school district of Alhambra to determine what variables influenced the market
Solution A real estate study was conducted in the school district of Alhambra to determine
was conducted in the school district of Alhambra to determine what variables influenced the market price of a house denoted by
Solution A real estate study was conducted in the school district of Alhambra
to determine what variables influenced the market price of a house denoted by
Solution A real estate study was conducted in the school
Solution A real estate study
(Solution) 1 A real estate study was conducted in the school district of Alhambra to determine what variables influenced the market price of a house (denoted by...

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13.1 A real estate study was conducted in the school district of Alhambra to determine what variables influenced the market price of a house (denoted by PRICE in $1,000s). Four possibly important variables – HOUSE (the house size in 1,000s of square feet), LOT (the lot size in 1,000s of square feet), BED (the number of bedrooms), BATH (the number of bathrooms), and AGE (the age of the house in years) – were explored. Listed in the table are data collected in 2003. . PRICE HOUSE LOT BED BATH AGE 315 1.152 3.959 3 2 88 319 1.177 6.500 2 1 71 349 1.087 6.503 3 1 89 360 1.338 6.520 3 1.5 79 380 1.485 6.724 2 1.5 75 389 1.646 5.920 3 2 46 424 1.652 6.247 4 2 49 425 1.680 6.300 4 1.5 43 438 1.700 6.400 3 2 39 450 1.768 6.300 4 1.5 38 458 2.105 7.200 4 2.5 43 468 2.150 7.300 4 3 46 488 2.000 7.155 4 3 36 498 2.321 8.250 4 3 40 505 2.400 8.100 4 2 25 515 2.525 8.250 4 3 35 535 2.570 8.300 4 3 28 545 2.571 9.640 4 3 33 550 3.016 8.948 4 3 13 The following regression model is to be fitted to the data: PRICE = ?0 + ?1HOUSE + ?2LOT + ?3BED + ?4BATH + ?5AGE + ?. Report the regression results (including coefficient estimates, standard errors, and R 2). The model has five different explanatory variables. Evaluate whether the coefficient on every explanatory variable (except for AGE) significantly differs from zero. Interpret the coefficient estimate of ?3. How would you test the significance of the age effect on the house value? Conduct the test using ? = 0.01. Test for the overall usefulness of the above regression model. Use ? = 0.01. ComputetheadjustedR2valuefromtheR2value. Compute the fair market price (in $) of a house located in the same school district with a house size of 1,900 square feet, a lot size of 7,100 square feet, 3 bedrooms, 2 bathrooms, and 40 years old.

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