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EAJ Real Estate used regression analysis to estimate the determinants of the sales price (P) of houses. The independent variables are the lot size (LOT),
EAJ Real Estate used regression analysis to estimate the determinants of the sales price (P) of houses. The independent variables are the lot size (LOT), number of bedrooms (BED), number of bathrooms (BATH), and the number of stories (STOR). The marketing director collects 36 weekly observations on LOT, BED, BATH, and STOR to estimate the following regression equation: P = Bo + 8, LOT + 82 BED + 83 BATH + By STOR DEPENDENT VARIABLE: P R-SQUARED F-STATISTIC PROB(F-STATISTIC) OBSERVATIONS: 36 0.2247 4.781 0.0150 Standard Variable Coefficient error Intercept -4009.55 3603.11 LOT 5.43 0.37 BED 2824.61 1214.81 BATH 17105.17 1734.43 STOR 7634.89 1007.97a. Does the number of bathrooms in a house have a statistically significant effect on the sales price? Substantiate your answer appropriately. (2 points) b. What fraction of the total variation in sales price remains unexplained? (2 points) c. Calculate the expected sales price for a house with a lot size of 2, 4 bedrooms, 3 bathrooms, and 1.5 stories. (3 points) d. Calculate the upper and lower 95% confidence interval for BATH. (3 points)
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