Question 2 The following MLR model was estimated with standardized variables (i.e., the z-scores for the...

Transcribed Image Text:

Question 2 The following MLR model was estimated with standardized variables (i.e., the z-scores for the dependent and independent variables). zprice = -.251 zozone - .162 zcrime + .480 zrooms zprice = z-score of housing price zozone = z-score of average ozone concentration in the housing community zcrime = z-score of crime rate in the housing community zrooms = z-score of bedroom numbers in the house According to the model, interpret the ceteris paribus effect below: a. Holding other variables constant, one standard deviation increase in ozone concentration is predicted to (increase/decrease) housing price by standard deviations. b. Given the sample standard deviation of price is approximately 10 thousand dollars, if ozone concentration increases by 1 standard deviation, the housing price is predicted to (increase/decrease) by dollars. c. Holding other variables constant, one standard deviation decrease in crime rate in the community is predicted to (increase/decrease) housing price by standard deviations. d. Given the sample standard deviation of price is approximately 10 thousand dollars, if crime rate decreases by 2 standard deviations, the housing price is predicted to (increase/decrease) by dollars. Question 2 The following MLR model was estimated with standardized variables (i.e., the z-scores for the dependent and independent variables). zprice = -.251 zozone - .162 zcrime + .480 zrooms zprice = z-score of housing price zozone = z-score of average ozone concentration in the housing community zcrime = z-score of crime rate in the housing community zrooms = z-score of bedroom numbers in the house According to the model, interpret the ceteris paribus effect below: a. Holding other variables constant, one standard deviation increase in ozone concentration is predicted to (increase/decrease) housing price by standard deviations. b. Given the sample standard deviation of price is approximately 10 thousand dollars, if ozone concentration increases by 1 standard deviation, the housing price is predicted to (increase/decrease) by dollars. c. Holding other variables constant, one standard deviation decrease in crime rate in the community is predicted to (increase/decrease) housing price by standard deviations. d. Given the sample standard deviation of price is approximately 10 thousand dollars, if crime rate decreases by 2 standard deviations, the housing price is predicted to (increase/decrease) by dollars.