Larger homes generally fetch a higher price than smaller homes. How much can we learn about a

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Larger homes generally fetch a higher price than smaller homes. How much can we learn about a house from the fact that it has a fireplace or more than the average number of bedrooms? Data for a random sample of 1047 homes can be found in the file ch14_MCSP_Real_Estate. There are six quantitative variables: Price ($), Living Area (sq. ft.), Bathrooms (#), Bedrooms (#), Lot Size (acres), and Age (years), and one categorical variable, Fireplace? (1 = Yes; 0 = No), denoting whether the house has at least one fireplace. We can use t methods to see, for example, whether homes with fireplaces sell for more, on average, and by how much. For the quantitative variables, create new categorical variables by splitting them at the median or some other splitting point of your choice, and compare home prices above and below this value. For example, the median number of Bedrooms of these homes is two. You might compare the prices of homes with one or two bedrooms to those with more than two. Write up a short report summarizing the differences in mean price based on the categorical variables you created.

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Business Statistics

ISBN: 9780133899122

3rd Canadian Edition

Authors: Norean D. Sharpe, Richard D. De Veaux, Paul F. Velleman, David Wright

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