Question

6 Exercise 14-35 Algo 33.71 points A realtor in Arlington, Massachusetts, is analyzing the relationship between the sale price of a home (Price in $), its square footage (Sqft), the number of bedrooms (Beds), and the number of bathrooms (Baths). She collects data on 36 sales in Arlington in the first quarter of 2009 for the analysis. A portion of the data is shown in the accompanying table. Price 728,000 695,538 Sqft 2,399 2,115 Beds 4 Baths 2.5 2.5 eBook 307,500 850 1 1.0 Print Click here for the Excel Data File e. References a. Estimate the model Price = By + 81 Sqft + B2Beds +83 Baths + E. (Round Coefficients to 2 decimal places.) Coefficients Intercept Sqft Beds Baths b-1. Interpret the coefficient of sqft. O For every additional square foot, the predicted price of a home increases by $127.71. O For every additional square foot, the predicted price of a home increases by $127.71, holding number of bedrooms and bathrooms constant. O For every additional square foot, the predicted price of a home increases by $127.71, holding square foot, number of bedrooms and bathrooms constant.

Answer 1

Excel > Data > Data Analysis > Regression

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.890072214
R Square	0.792228546
Adjusted R Square	0.772749972
Standard Error	84800.48797
Observations	36
ANOVA
	df	SS	MS	F	Significance F
Regression	3	8.77428E+11	2.92476E+11	40.67179427	4.99573E-11
Residual	32	2.30116E+11	7191122761
Total	35	1.10754E+12
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	22155.45481	58258.39153	0.38029637	0.70623813	-96513.00544	140823.9151	-96513.00544	140823.9151
Sqft	127.7049612	41.13793862	3.104311142	0.003972779	43.90972238	211.5002001	43.90972238	211.5002001
Beds	23271.30456	24644.8608	0.944266018	0.352109179	-26928.63415	73471.24327	-26928.63415	73471.24327
Baths	94285.18627	29845.19751	3.159140971	0.003445405	33492.50831	155077.8642	33492.50831	155077.8642

a)

Price = 22155.45+127.71*Sqft+23271.30*Beds+94285.19*Baths

	Coefficients
Intercept	22155.45
Sqft	127.71
Beds	23271.30
Baths	94285.19

b-1)

b-2)

O For every additional square foot, the predicted price of a home increases by $127.71, holding number of bedrooms and bathrooms constant.

O For every additional bedroom, the predicted price of a home increases by $23,271.30, holding square footage and number of baths constant.

b-3)

O For every additional bathroom, the predicted price of a home increases by $94,285.19, holding square footage and number of bedrooms constant.

c)

Given, sqft = 2382, Beds = 3 and Baths = 2

Price = 22155.45+127.71*Sqft+23271.30*Beds+94285.19*Baths

Price = 22155.4548+127.7050*2382+23271.3046*3+94285.1863*2 = 584732.9587 = $584733 (rounded)