Question
Construct a linear regression model that predicts the price of houses in a neighborhood in Canton given their area in square feet and their age
Construct a linear regression model that predicts the price of houses in a neighborhood in Canton given their area in square feet and their age in years
House price in $1000s | Square Feet | House age (Years) |
245 | 1400 | 15 |
312 | 1600 | 17 |
279 | 1700 | 13 |
308 | 1875 | 24 |
199 | 1100 | 25 |
219 | 1550 | 20 |
405 | 2350 | 19 |
324 | 2450 | 12 |
319 | 1425 | 14 |
255 | 1700 | 16 |
(a) Define the design matrix and the true response.
(b) Complete the following tables (Show your work for partial credits). Interpret the results.
E[Coefficients] | Variance of Coefficients | |
Intercept | ||
Square Feet | ||
House age |
df | SS | MS | |
Regression | |||
Residual | |||
Total |
R Squared | |
Adjusted R Squared | |
AIC | |
Standard Error | |
Number of Observations |
(c) Construct proper hypothesis tests to identify the factors that significantly change (statistically) the house price.
(d) Find the expected values and prediction intervals for the following:
Square Feet | House age (Years) | Expected Price | Lower Prediction bound | Upper Prediction bound |
1700 | 13 | |||
2400 | 17 | |||
4000 | 5 |
(e) Interpret the results in the table above.
(f) Check and discuss the potential of multicollinearity between your input factors.
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