A study [6] of the housing market in Mission Viejo, California, looked at 15 matched pairs of houses that were sold or rented in 2005. Table 10.4 shows the sale price for each house, the size of the house (square feet), and the monthly rent for the house that is a matched pair.

a. Estimate a simple regression equation using price as the dependent variable and size as the explanatory variable.

b. Estimate a simple regression equation using price as the dependent variable and rent as the explanatory variable.

c. Estimate a multiple regression equation using price as the dependent variable and size and rent as explanatory variables.

d. Explain any differences between your multiple regression equation

(c) and the two simple regression equations (a and b).

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Table 10.4: Exercise 10.10 Price ($) Size Rent ($) Price ($) Size Rent ($) 608,000 1,325 2,000 590,000 1,200 2,100 667,500 2,145 2,350 688,000 1,549 2,000 650,000 1,561 2,300 599,900 1,109 1,900 660,000 1,200 1,900 715,000 2,000 2,800 865,000 2,300 2,750 630,000 1,560 2,325 652,900 1,472 2,195 915,000 3,418 3,000 725,000 2,026 2,500 600,000 1,471 2,200