In this exercise we study the nature of the interaction between x1, square footage, and x2, rating.

Question:

In this exercise we study the nature of the interaction between x1, square footage, and x2, rating.
a. Consider all houses with a rating of 2. In this case, predicted sales price is (using the least squares point estimates in Figure 15.11)

Calculate Å· when x1 = 13 and 22. Plot Å· versus x1, for x1 = 13 and 22.
b. Consider all houses with a rating of 8. In this case, predicted sales are (using the least squares point estimates in Figure 15.11)

Calculate Å· when x1 = 13 and 22. Plot Å· versus x1, for x1 = 13 and 22.
c. By comparing the plots you made in a and b, discuss the nature of the interaction between x1 and x2.