Question

A regression analysis was used for predicting the selling price of a home (in thousands of dollars) using lot size, home size, and whether or not the home has a pool. The presence of a pool was modeled with a dummy variable that has a value of 1 if the home has a pool and a value of O if the home does not have a pool. The value of the coefficient of the pool dummy variable is 23.5. What is the interpretation of this coefficient? Pay attention to the units! O On average, a home with a pool will sell for $23.50 more than a home without a pool. o On average, a home with a pool will sell for $23.50 less than a home without a pool. O On average, a home with a pool will sell for $23,500 less than a home without a pool. O On average, a home with a pool will sell for $23,500 more than a home without a pool.

Answer 1

The solution to this problem is

of Solution Given the value Coefficient of the bool dummy variable is 23.5 and the units to predicting the selling price of a home is in thousands of dollars (10oo & Jaso the collect anseel is with bool will On average , a home 23500 more than a a sell for home withoud a bool