In column (4), does the elasticity of price with respect to size depend on the size...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In column (4), does the elasticity of price with respect to size depend on the size of the house? Use a 5% level of significance for the test. The critical value is (two decimal places) The test statistic is (two decimal places) Is there sufficient evidence to conclude that the elasticity of price with respect to size depends on the size of the house? (Type Yes or No) QUESTION 5 What can we conclude about the interaction term between pool and view in column (5)? a. The interaction term is significant at the 10% level and its sign indicates that the impact of installing a pool has a smaller effect on price when the house has a view b. The interaction term is significant at the 10% level and its sign indicates that the impact of installing a pool has a larger effect on price when the house has a view. O c. The sign of the interaction term implies that the impact of installing a pool has a smaller effect on price when the house has a view, but the estimate is not statistically significant at the 10% level. d. The sign of the interaction term implies that the impact of installing a pool has a larger effect on price when the house has a view, but the estimate is not statistically significant at the 10% level QUESTION 6 Regardless of your conclusion in Question 5, and continuing to use column (5), answer the following questions: Find the approximate percent effect of adding a pool on the price of a house with a view. Find the approximate percent effect of adding a pool on the price of a house without a view. Report both answers to one decimal place without a percentage sign. QUESTION 2 Suppose a different family purchases a 2,500 square foot house, and also plans to undertake extensions that will increase the total size of the house by 500 square feet. Again, use the results in column (1), and assume the house has a pool, is in excellent condition, but does not have a view (which will not change after the extensions). Without performing any further calculations, what are you able to conclude about the expected impact of the extensions on this house? O a. Both the estimated dollar increase and the estimated percentage increase in price would be the same as for the house described in Question 1. O b. The estimated percentage increase in price would be the same as for the house described in Question 1, but the estimated dollar increase would be higher. O c. Both the estimated dollar increase and the estimated percentage increase in price would be higher than for the house described in Question 1. O d. The estimated percentage increase in price would be the same as for the house described in Question 1, but the estimated dollar increase would be lower. QUESTION 3 Using column (4), is the overall effect of size on price statistically significant? How would you go about testing this hypothesis? Match each question to the correct option. What is the null hypothesis for this test? A. t-test What is the alternative hypothesis for this test? What is the appropriate test? What is the appropriate critical value? Assume a 5% level of significance. B. H : B B # 2 C. H : B + B = 1 D. 1.64 E. =. H : B = 0 0 1 F. 2.30 G. H: At least one of B and/or B #0 # #0 H. H : B = P I. 1.96 J. F-test K. 3.00 L. H Ho =0 At least one of Band/or B0 M. 3.84 N. . H : B# 0 B. QUESTION 1 Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. This table is used for Questions 1-6. Dependent variable: In(Price) Regressor Size In(Size) In(Size) Bedrooms Pool View Pool X View Condition Intercept (1) 0.00042 (0.000038) 0.082 (0.032) 0.037 (0.029) 0.13 (0.045) 10.97 (0.069) 0.102 (2) 0.72 0.69 (0.054) 0.071 (0.034) 0.027 (0.028) 0.12 (0.035) 6.60 (0.39) (3) 0.098 0.68 (0.087) 0.0036 (0.037) 0.071 (0.034) 0.026 (0.026) 0.12 (0.035) 6.63 (0.53) (4) 0.099 0.57 (2.03) 0.0078 (0.14) 0.071 (0.036) 0.027 (0.029) 0.12 (0.036) 7.02 (7.50) 0.099 (5) 0.73 0.69 (0.055) 0.071 (0.035) Summary Statistics SER R 0.74 0.73 0.73 Variable definitions: Price = sale price ($); Size = house size (in square feet); Bedrooms = number of bedrooms; Pool = binary variable (1 if house has a swimming pool, 0 otherwise); View = binary variable (1 if house has a nice view, 0 otherwise); Condition = binary variable (1 if real estate agent reports house is in excellent condition, 0 otherwise). 0.027 (0.030) 0.0022 (0.10) 0.12 (0.035) 6.60 (0.40) 0.099 A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions? (Report your answer to the nearest dollar and do not include any commas or $ signs.) In column (4), does the elasticity of price with respect to size depend on the size of the house? Use a 5% level of significance for the test. The critical value is (two decimal places) The test statistic is (two decimal places) Is there sufficient evidence to conclude that the elasticity of price with respect to size depends on the size of the house? (Type Yes or No) QUESTION 5 What can we conclude about the interaction term between pool and view in column (5)? a. The interaction term is significant at the 10% level and its sign indicates that the impact of installing a pool has a smaller effect on price when the house has a view b. The interaction term is significant at the 10% level and its sign indicates that the impact of installing a pool has a larger effect on price when the house has a view. O c. The sign of the interaction term implies that the impact of installing a pool has a smaller effect on price when the house has a view, but the estimate is not statistically significant at the 10% level. d. The sign of the interaction term implies that the impact of installing a pool has a larger effect on price when the house has a view, but the estimate is not statistically significant at the 10% level QUESTION 6 Regardless of your conclusion in Question 5, and continuing to use column (5), answer the following questions: Find the approximate percent effect of adding a pool on the price of a house with a view. Find the approximate percent effect of adding a pool on the price of a house without a view. Report both answers to one decimal place without a percentage sign. QUESTION 2 Suppose a different family purchases a 2,500 square foot house, and also plans to undertake extensions that will increase the total size of the house by 500 square feet. Again, use the results in column (1), and assume the house has a pool, is in excellent condition, but does not have a view (which will not change after the extensions). Without performing any further calculations, what are you able to conclude about the expected impact of the extensions on this house? O a. Both the estimated dollar increase and the estimated percentage increase in price would be the same as for the house described in Question 1. O b. The estimated percentage increase in price would be the same as for the house described in Question 1, but the estimated dollar increase would be higher. O c. Both the estimated dollar increase and the estimated percentage increase in price would be higher than for the house described in Question 1. O d. The estimated percentage increase in price would be the same as for the house described in Question 1, but the estimated dollar increase would be lower. QUESTION 3 Using column (4), is the overall effect of size on price statistically significant? How would you go about testing this hypothesis? Match each question to the correct option. What is the null hypothesis for this test? A. t-test What is the alternative hypothesis for this test? What is the appropriate test? What is the appropriate critical value? Assume a 5% level of significance. B. H : B B # 2 C. H : B + B = 1 D. 1.64 E. =. H : B = 0 0 1 F. 2.30 G. H: At least one of B and/or B #0 # #0 H. H : B = P I. 1.96 J. F-test K. 3.00 L. H Ho =0 At least one of Band/or B0 M. 3.84 N. . H : B# 0 B. QUESTION 1 Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. This table is used for Questions 1-6. Dependent variable: In(Price) Regressor Size In(Size) In(Size) Bedrooms Pool View Pool X View Condition Intercept (1) 0.00042 (0.000038) 0.082 (0.032) 0.037 (0.029) 0.13 (0.045) 10.97 (0.069) 0.102 (2) 0.72 0.69 (0.054) 0.071 (0.034) 0.027 (0.028) 0.12 (0.035) 6.60 (0.39) (3) 0.098 0.68 (0.087) 0.0036 (0.037) 0.071 (0.034) 0.026 (0.026) 0.12 (0.035) 6.63 (0.53) (4) 0.099 0.57 (2.03) 0.0078 (0.14) 0.071 (0.036) 0.027 (0.029) 0.12 (0.036) 7.02 (7.50) 0.099 (5) 0.73 0.69 (0.055) 0.071 (0.035) Summary Statistics SER R 0.74 0.73 0.73 Variable definitions: Price = sale price ($); Size = house size (in square feet); Bedrooms = number of bedrooms; Pool = binary variable (1 if house has a swimming pool, 0 otherwise); View = binary variable (1 if house has a nice view, 0 otherwise); Condition = binary variable (1 if real estate agent reports house is in excellent condition, 0 otherwise). 0.027 (0.030) 0.0022 (0.10) 0.12 (0.035) 6.60 (0.40) 0.099 A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions? (Report your answer to the nearest dollar and do not include any commas or $ signs.)
Expert Answer:
Answer rating: 100% (QA)
QUESTION 2 Based on the information provided and assuming the results in column 1 we can conclude th... View the full answer
Related Book For
Introductory Econometrics A Modern Approach
ISBN: 978-0324660548
4th edition
Authors: Jeffrey M. Wooldridge
Posted Date:
Students also viewed these finance questions
-
Answer the following problems by showing your computations. You may upload your freehand manual computations,excel worksheet, or word file. A CD player has five components that all must function for...
-
In this question you will be asked to reflect on a project you have been involved in or observed, in which a design evolved, or could have evolved, through applying a theory of user behaviour. You...
-
In a Hopfield neural network configured as an associative memory, with all of its weights trained and fixed, what three possible behaviours may occur over time in configuration space as the net...
-
You are a financial adviser advising the owner of a multi-national business who is considering which of two countries is the most tax-efficient in which to domicile. You are given that the owner...
-
Write a paper on correlation between sales and gross income by Starbucks and also describe Hypothesis Statement and Data Collection &Analysis.
-
Obtain the node-voltage equations for the circuit in Fig. 3.111 by inspection. Then solve for Vo. Figure 3.111 For Prob. 3.67. 2 A 4 2 4 A 5 3 Vo 10
-
Netcap experiences returns of 5 percent or 45 percent, each with an equal probability. What is the retum standard deviation for Netcap? a. b. C. d. 30 percent 25 percent 20 percent 10 percent
-
The Heinrich Tire Company recalled a tire in its subcompact line in December 2011. Costs associated with the recall were originally thought to approximate $50 million. Now, though, while management...
-
Blossom Company issued $510,000 of 8%, 20-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1. Prepare the journal entry to record the issuance of the bonds....
-
Thunder Attractions, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost 136,000 and have an estimated useful life of 5 years. It will be sold for 60,000...
-
What are some barriers to good communication? Explain
-
Check my argumentative essay and let me know if it has plagiarism or any other fault in the essay. The essay should be in APA format. Title: The Imperative Shift Towards Alternatives: A Plea Against...
-
Discuss briefly the consideratings required in order to determine whether a trade-related mode of entry or an investment mode of entry should be used. Use your various external and internal analysis...
-
Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 20% each of the last three...
-
Draw and solve the monopoly problem for two teams that are in the same city: Team 1 has a seating capacity of 10,000 and Team 2 has a seating capacity of 25,000. The demand for tickets is the same...
-
The spring in a spring loaded toy gun has a spring constant of 32.0 N/m. In preparation for a shot, the spring is compressed by 4.9 cm from its relaxed state. The "bullet" (a 9.0 gram projectile) is...
-
Assigning Cost of Resources to Activities, Unbundling the General Ledger Golding Bank provided the following data about its resources and activities for its checking account process: Resources...
-
By referring to Figure 13.18, determine the mass of each of the following salts required to form a saturated solution in 250 g of water at 30 oC: (a) KClO3, (b) Pb(NO3)2, (c) Ce2(SO4)3.
-
Consider the savings function Where e is a random variable with E(e) = 0 and Var(e) = (2e, Assume that e is independent of inc. (i) Show that E(u|inc) = 0, so that the key zero conditional mean...
-
Consider a linear model to explain monthly beer consumption: beer = (0 + (1inc + (2 price + (3 educ + (4 female + u. E(u|inc, price, educ, female) = 0 Var(u|inc, price, educ, female) = (2 inc2. Write...
-
Suppose that the population model determining y is y = (0 + (1x1 + (2x2 + (3x3 + u,
-
What is this project's discounted payback period? (10 points) a. 3.04 b. 3.24 c. 3.44 d. 3.64 Assume that the appropriate cost of capital for this project is 12 percent. Time 0 1 Cash Flow -$750 $400...
-
What is this project's IRR? a. 25.67% b. 27.19% c. 28.76% d. 29.86% Assume that the appropriate cost of capital for this project is 12 percent. 0 1 2 Time Cash Flow -$750 $400 $300 3 $200 4 $400
-
What is this project's Modified IRR (MIRR)? a. 18.78% b. 19.65% c. 20.14% d. 21.37% Assume that the appropriate cost of capital for this project is 12 percent. Time Cash Flow 0 1 -$750 $400 $300 2 3...
Study smarter with the SolutionInn App