Consider the hedonic pricing model given by Des Rosiers and Theriault (1996), where rental value of in Canadian dollars per month is a function of nine to fourteen variables. Based on a sample of 13,378 observations they obtained the following estimates for three key variables. Dependent variable: house rent ($ per month) Coefficient t-ratio Intercept Ln(Age)= log of age of the property Nbrooms=number of bedrooms Elevator=1 if the building has an elevator, O otherwise Adjusted R2 282.21 -53.10 48.47 88.51 56.09 -59.71 104.81 45.04 0.651 F stat 2082.27 Notes: The model includes other covariates, see Des Rosiers and Theriault (1996), C Brooks page 157 1. Interpret the coefficient estimates given above. Note that we have a dummy variable - Elevator. 2. How can we test the overall significance of the model? Discuss consid- ering three explanatory variables given above (k=3) and N=13,378. 3. The estimates are based on a cross-section data. Therefore, someone may suspect that there is heteroscedasticity. Briefly discuss the concept of heteroscedasticity, how we can test it, the consequences of ignoring heteroscedasticity and what remedy can be used. Consider the hedonic pricing model given by Des Rosiers and Theriault (1996), where rental value of in Canadian dollars per month is a function of nine to fourteen variables. Based on a sample of 13,378 observations they obtained the following estimates for three key variables. Dependent variable: house rent ($ per month) Coefficient t-ratio Intercept Ln(Age)= log of age of the property Nbrooms=number of bedrooms Elevator=1 if the building has an elevator, O otherwise Adjusted R2 282.21 -53.10 48.47 88.51 56.09 -59.71 104.81 45.04 0.651 F stat 2082.27 Notes: The model includes other covariates, see Des Rosiers and Theriault (1996), C Brooks page 157 1. Interpret the coefficient estimates given above. Note that we have a dummy variable - Elevator. 2. How can we test the overall significance of the model? Discuss consid- ering three explanatory variables given above (k=3) and N=13,378. 3. The estimates are based on a cross-section data. Therefore, someone may suspect that there is heteroscedasticity. Briefly discuss the concept of heteroscedasticity, how we can test it, the consequences of ignoring heteroscedasticity and what remedy can be used