Question

A real estate analyst estimates the following regression, relating a house price to its square footage (Sqft):

PriceˆPrice^ = 48.11 + 52.06Sqft; SSE = 56,244; n = 50

In an attempt to improve the results, he adds two more explanatory variables: the number of bedrooms (Beds) and the number of bathrooms (Baths). The estimated regression equation is

PriceˆPrice^ = 28.82 + 40.84Sqft + 10.34Beds + 16.65Baths; SSE = 48,681; n = 50

Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 3 decimal places.)

Answer 1

A real estate analyst estimates the following regression , relating a house price to its square footage (Sqft):
A real Estate analyst Estimates the following regression, relating a house price to its square footage (Sqft): Precem price^= 48.11+ 52.06 Sqft ; SS6=56,244; n=50 In an attempt to improve the results, he adds two more Explanatory variables, the number of bedrooms (Beds) and the number of bathrooms ( Baths), The Estimated regression Eqn.is Price pice .28.82 + Lo 84 Sqft + 1034 Beds + 16.65 Raths: SSE = 48,681 in:50 Calculate the value of the test statistic. The value of test statistic is Fale = 65€p - Sseu)/ df, Sseul dfz There is restriction on two variable hence df, = 2 and df = 50-3-1. - 46 :

we have SSER = 56,244 and SSEN = 48,681 Plug in the values to find the test statistic Fz, uc = (56,244 - 48,681) /a 48,681 / 46 7563/2 48,681/46 3781.5 1058.28261 - 3.57324212 = 3.573