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Despite the downturn in home prices and listings, the manager of 4Sale Realty is trying to understand some of the factors inuencing the selling price
Despite the downturn in home prices and listings, the manager of 4Sale Realty is trying to understand some of the factors inuencing the selling price of a home. It's well known that house size and location are key factors. but the manager wants to develop a more rened model and wants to understand the impact on price of 3 additional factors; a pool, home security systems, Canada Post 'at home' mail delivery. She asks you to investigate this and provide some insight. A random sample of 30 homes are selected. For each home. the following information was gathered (all gures are in thousands of dollars): 3; = House selling price X1 = In ground swimming pools x: = Security systems and oodlights X3 = Home mail delivery by Canada Post The sample data produced the following results: SUMMARY OUTPUT Regression Statistics Multiple R 0.8050 R Square 0.6480 Adj R Square 0.6074 Standard Error 9.1987 Observations 30 ANOVA df SS MS F Regression UNKOWN 4,050.0000 UNKOWN UNKOWN Residual UNKOWN 2,200.0000 UNKOWN Total 29 6,250.0000 Regression output Coefficients Std Error t Stat Intercept 14.0000 7.0000 2.0000 Pool -1.0000 0.7000 -1.4286 Home Security 30.0000 5.2000 5.7692 Mail Delivery 0.2000 0.0800 2.5000 a. Test to determine at the 5% significance level whether in ground swimming pools is related to the house selling price. b. State the population regression line. c. Test the overall validity of the model at a 5% significance level. d. If you identified variables in the model that are not related to the selling price of a home, and you removed these variables, what will happen to R2? Explain
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