Sales of single$-$family houses have been fast in Mid City this year. This has especially

been true in older, more established neighbourhoods where housing is relatively

inexpensive compared to the new homes being built in newer neighbourhoods.

Nevertheless, there are also many families who are willing to pay a higher price for the

prestige of living in one of the newer neighbourhoods. The data file C$10\_02.$xlsx contains

data on $128$ recent sales in Mid City.

For each sale, the file shows the neighbourhood $(1,2,$ or $3)$ in which the house is located,

the number of offers made on the house, the square footage, whether the house is made

primarily of brick, the number of bathrooms, the number of bedrooms, and the selling price.

Neighbourhoods $1$ and $2$ are more traditional neighbourhoods, whereas neighbourhood $3$

is a newer more prestigious neighbourhood. Using regression, estimate and interpret the

pricing structure of houses in Mid City. Consider the following considerations in your

evaluation.

a$.$ Do buyers pay a premium for a brick house, assuming all else is equal?

b$.$ Is there a premium for a house in a neighbourhood $3,$ assuming all else is equal?

c$.$ For purposes of estimation and prediction, could neighbourhoods $1$ and $2$ be

collapsed into a single older neighbourh