The Housing Price Interactive Exercise Now that we've reviewed at least a portion of the literature, it's time to build your own model. Recall that in Section 1.5, we built a simple model of the price of a house as a function of the size of that house, Equation 1.21: P, = 40.0 + 0.138S; (1.21) where: P; = the price (in thousands of dollars) of the ith house S; = the size (in square feet) of the ith house Equation 1.21 was estimated on a sample of 43 houses that were purchased in the same Southern California town (Monrovia) within a few weeks of each other. It turns out that we have a number of additional independent variables for the data set we used to estimate Equation 1.21. Also available are: N; = the quality of the neighborhood of the ith house (1 = best, 4 = worst) as rated by two local real estate agents A; = the age of the ith house in years BE, = the number of bedrooms in the ith house BA; = the number of bathrooms in the ith house