Consider the following regression results which are produced in Des Rosiers and Thriault (1996) paper on rental amenities and the stability of hedonic prices. The dependent variable, MR, is monthly rent paid for the unit (measured in $). Variables Coefficient Intercept B1 248.20 LnAPPAGE B2 -56.48 NBROOMS B3 56.73 AREABYRM BA 3.98 HEATED B5 59.31 LIGHTED B6 4.17 SEMIFURN BY 15.52 ELEVATOR B: 86.89 LnDISTCBD B. 7.41 N (no. of observations) = 13 378 t-value 46.90 -59.74 107.85 29.86 46.22 3.63 11.10 43.58 5.78 p-value .0001 .0001 .0001 .0001 .0001 .0003 .0001 .0001 .0001 K (no of coefficients estimated in regression) = 9 Avg. rent=$404 Adj. R:0.6869 Variables LnAPPAGE NBROOMS AREABYRM HEATED Definition of variables Natural log of apparent age of the building where the unit stands, in years Number of rooms in the unit Area per room, in square metres Monthly rent includes heating - dummy variable Monthly rent includes lighting - dummy variable Fridge and cooker are included in rent- dummy variable Building has an elevator - dummy variables Natural log of Euclidian distance from CBD, in kilometres LIGHTED SEMIFURN ELEVATOR LnDISTCBD B1. State the null and alternative hypotheses that the apparent age of the building does not affect the monthly rent paid for the unit. [2] B2. Based on the regression results reported in the table, what is the additional rent paid for a unit with 3 rooms, an elevator, and unfurnished, holding all things constant? Explain [4] B3. Referring to the coefficient estimate of LnDISTCBD, what does this estimate inform you about the location of the rental unit from the CBD on rental paid? Is this consistent with intuition? What could be the reason for the positive relationship between LnDISTCBD and monthly rental? [2,2,2] Consider the following regression results which are produced in Des Rosiers and Thriault (1996) paper on rental amenities and the stability of hedonic prices. The dependent variable, MR, is monthly rent paid for the unit (measured in $). Variables Coefficient Intercept B1 248.20 LnAPPAGE B2 -56.48 NBROOMS B3 56.73 AREABYRM BA 3.98 HEATED B5 59.31 LIGHTED B6 4.17 SEMIFURN BY 15.52 ELEVATOR B: 86.89 LnDISTCBD B. 7.41 N (no. of observations) = 13 378 t-value 46.90 -59.74 107.85 29.86 46.22 3.63 11.10 43.58 5.78 p-value .0001 .0001 .0001 .0001 .0001 .0003 .0001 .0001 .0001 K (no of coefficients estimated in regression) = 9 Avg. rent=$404 Adj. R:0.6869 Variables LnAPPAGE NBROOMS AREABYRM HEATED Definition of variables Natural log of apparent age of the building where the unit stands, in years Number of rooms in the unit Area per room, in square metres Monthly rent includes heating - dummy variable Monthly rent includes lighting - dummy variable Fridge and cooker are included in rent- dummy variable Building has an elevator - dummy variables Natural log of Euclidian distance from CBD, in kilometres LIGHTED SEMIFURN ELEVATOR LnDISTCBD B1. State the null and alternative hypotheses that the apparent age of the building does not affect the monthly rent paid for the unit. [2] B2. Based on the regression results reported in the table, what is the additional rent paid for a unit with 3 rooms, an elevator, and unfurnished, holding all things constant? Explain [4] B3. Referring to the coefficient estimate of LnDISTCBD, what does this estimate inform you about the location of the rental unit from the CBD on rental paid? Is this consistent with intuition? What could be the reason for the positive relationship between LnDISTCBD and monthly rental? [2,2,2]
