The article “Zoning and Industrial Land Values: The Case of Philadelphia” (AREUEA Journa...

The article “Zoning and Industrial Land Values: The Case of Philadelphia” (AREUEA Journal [1991]: 154– 159) considered a regression model to relate the value of a vacant lot in Philadelphia to a number of different predictor variables.

a. One of the predictors was x₃ = the distance from the city’s major east-west thoroughfare, for which b₃ = .489 and . The model contained seven predictors, and the coefficients were estimated from a sample of 100 vacant lots. Calculate and interpret a confidence interval for β₃ using a confidence level of 95%.

b. Another predictor was x₁, an indicator variable for whether the lot was zoned for residential use, for which b₁ = - .183 and . Carry out a test of H₀: β₁ = 0 versus H_a: β₁ ≠ 0, and interpret the conclusion in the context of the problem.