Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Content Suppose, that you are commissioned to develop a forecasting model for residental property selling price in an Adelaide suburb. The sample information availble to

Content

Suppose, that you are commissioned to develop a forecasting model for residental property selling price in an Adelaide suburb. The sample information availble to you is collected from a credible source on 176 houses recently sold in the suburb.

- SalePrice (Y): The transaction price in dollars, as recorded on the contract of sale.

-LandArea (x^1): The size of the land area in square metres.

Rooms(x^2): The number of main rooms in a dwelling. Main rooms include bedrooms, living areas, and kitchens, but exclude bathrooms, laundries, and water closets. Groups of small rooms that are not fully enclosed may be counted as one room (e.g. kitchen-dinettes).

EQM(^3): Recorded in square metres. This is a weighted average of all buildings on the property (Equivalent Main Area). The main dwelling will have a weighting of 1, lesser structures such as carports will have a lower weighting. These weightings are not fixed and depend upon the discretion of the assessor. The overall value is a reasonable proxy for the building area.

Condition(C): This is a subjective condition code with the value 0 indicating some minor structural problems or the need for repairs, the value 1 indicating good condition and the value 2 indicating excellent condition.

YearsBuilt (x^4): The number of years since the house was built.

Question 1-

image text in transcribedimage text in transcribed
Create a dummy variable named D for house condition such that it takes the value 1 if the original condition variable C taking the values 0 and 1, otherwise takes the value 0. Suppose that you begin with exploring a regression model, In (Y) = a + B,In (X,)+ A,*+ AXs+ BX+ + BD+e. Attach an Excel file that contains your regression output of the model and write down the estimated model. 10 marksAfter some statistical investigation you may select a regression model Y = a + BIX, + BzXz + ByX's + P4X3+ BD . Xi+ e. Attach an Excel file that contains your regression output of the model. Interpret the estimate of B 10 marks

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Calculus

Authors: Jon Rogawski, Colin Adams, Robert Franzosa

4th Edition

1319055842, 9781319055844

More Books

Students also viewed these Mathematics questions

Question

Compute the value of Q in the following diagram. 50 50 50 50 = 12%

Answered: 1 week ago

Question

7. How can the models we use have a detrimental effect on others?

Answered: 1 week ago