Housing prices. How does the price of a house depend on its size? Data from Saratoga, New York, on 1057 randomly selected houses that had been sold include data on price ($) and Living Area 1ft22, producing the following graphs and computer output:

Dependent variable is: Price R-squared = 57.6%
s = 50290 with 1057 - 2 = 1055 degrees of freedom Variable Coefficient SE(Coeff) t-Ratio P-Value Intercept 7239.28 4520.34 1.60 0.11 Living Area 88.30 2.33 37.8 6.0001

a) Explain in words and numbers what the regression says.

b) Discuss the intercept, taking note of its P-value.

c) The output reports s = 50,290. Explain what that means in this context.

d) What’s the value of the standard error of the slope of the regression line?

e) Explain what that means in this context.

Transcribed Image Text:

600000 550000 500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 + 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 Living Area (ft)