Second Part Only (#10)
9. (8 points) You have gained access to a dataset that includes commercial real estate transaction that took place during the 2017-2019 time period in Miami, FL and in San Francisco, CA. After general data clean up" you ran the following regression: Price = a + B,SQFT + B2Year + B. Class + B.DumMiami Where: - Price is the price in dollars paid for each property transacted. - SQFT is the size of each property transacted in squared feet. - Year takes a value of 0, 1 or 2 if the transaction took place during the year 2017, 2018 or 2019, respectively. Class takes a value of 0, 1 or 2 if the transacted property is of class A, B or C, respectively DumMiami is a dummy variable that takes a value of 1 if the property transacted is locate in Miami and 0 otherwise. For each of the coefficients (CB, B2, B, and B.) please predict whether you expect it to be positive, negative or ambiguous and explain in one sentence. 10. (9 points) Referring to problem 9, what other variables would you have liked to include in your regression if you could get any information you want about each property? a. List 3 additional variables you would have liked to include in your regression in order to improve its accuracy and clearly explain how each variable would be defined (like I did in in question 9) b. Briefly explain the sign you would expect (negative, positive or ambiguous) from the coefficient of each of these variables. 9. (8 points) You have gained access to a dataset that includes commercial real estate transaction that took place during the 2017-2019 time period in Miami, FL and in San Francisco, CA. After general data clean up" you ran the following regression: Price = a + B,SQFT + B2Year + B. Class + B.DumMiami Where: - Price is the price in dollars paid for each property transacted. - SQFT is the size of each property transacted in squared feet. - Year takes a value of 0, 1 or 2 if the transaction took place during the year 2017, 2018 or 2019, respectively. Class takes a value of 0, 1 or 2 if the transacted property is of class A, B or C, respectively DumMiami is a dummy variable that takes a value of 1 if the property transacted is locate in Miami and 0 otherwise. For each of the coefficients (CB, B2, B, and B.) please predict whether you expect it to be positive, negative or ambiguous and explain in one sentence. 10. (9 points) Referring to problem 9, what other variables would you have liked to include in your regression if you could get any information you want about each property? a. List 3 additional variables you would have liked to include in your regression in order to improve its accuracy and clearly explain how each variable would be defined (like I did in in question 9) b. Briefly explain the sign you would expect (negative, positive or ambiguous) from the coefficient of each of these variables
