In "Hedonic Price Models and Sun-and-Beach Package Tours: The Norwegian Case by Christer Thrane (Journal of Travel Research, Vol. 43, February 2005, 302-308), the author examines the price of popular winter vacation tourist packages to the Canary Islands to escape the Norwegian winter. Table 1 on page 6 of the exam shows the list of variables in the paper, and Table 2 shows the regression results where the natural logarithm of the package price is used as the dependent variable, and other variables enter the regression as they appear in Table 1. The Difference (%) shows the expected percent change in package prices if the dummy is 1 versus 0 if the variable is significant, which is a reliable estimate of the effects of each dummy on prices since the dependent variable is logged. Model 2 differs from model 1 in the regression results with the addition of the star rating of the destination hotel as an independent variable. d. A tour package has the following attributes: A tour by the company Saga on the island of Tenerife at Saga's resort hotel built in 1993 that is 100 meters from the beach. Hotel has air conditioning, an on-site restaurant, free TV, 24 hour reception, and a swimming pool for children. The rooms at the hotel are apartment style (not bungalow) with 3 rooms. If other features are not listed here, they are not included in the package. What would be model ls predicted price of the package in Norwegian krone? (12 points) VARIABLES IN THE STUDY (N = 252) Expected SD Sign 660.170 .139 .270 .204 .454 + .500 .470 .436 + + .329 + .281 .450 .495 + ? Variable Description Mean PRICE Package tour price (NOK) 4702.120 LOGPRICE Log of PRICE 8.446 AC Air conditioning in the apartment/common areas (yes = 1; no = 0) .070 BREAK Breakfast without price surcharge (yes = 1; no = 0) .043 BAR Bar at the hotel (yes = 1; no = 0) .710 REST Restaurant at the hotel (yes = 1; no = 0) .484 TV TV/satellite TV without price surcharge (yes = 1; no = 0) SWIM Swimming pool for children at the hotel (yes = 1; no = 0) .746 EXKITCH Extra kitchen equipment (coffee machine, toaster, microwave oven, and so on) without price surcharge (yes = 1; no = 0) MM Availability of minimarket at the hotel (yes = 1; no = 0) .424 SPORT Availability of sport facilities at the hotel (tennis, squash, golf, and so on) (yes = 1; no = 0) .246 RESORT Tour operator's own' hotel (that is, a resort) (yes = 1; no = 0) .123 BUILT Hotel built after 1990 (yes = 1; no = 0) .246 BUNG Bungalow or apartment (bungalow = 1; apartment = 0) .035 3ROOM 3-room or 2-room apartment (3-room = 1; 2-room = 0) .087 RESEP 24-hour reception service at the hotel (yes = 1; no = 0) .567 LIFT Lift in the building(s) (yes = 1; no = 0) NOISE Noise in the area (little = 0; some = 1; disturbing = 2) .809 DISTBEACH Distance to beach (in meters) 730.74 DISTSHOP Distance to shopping areas (in meters) 570.31 ROOMS Number of rooms in apartment-hotel 144.37 STARS Hotel star rating (2 stars = 0; 2 stars + = 1; 3 stars = 2; 3 stars + = 3; 4 stars = 4; 4 stars + = 5) 2.36 ? + ? ? ? .431 .329 .431 .185 .288 .496 .500 .664 715.75 704.86 131.70 .492 1.14 + Note: The variables TOUROP and ISLAND (see text) have four categories each. For TOUROP, the categories are Saga (30%), Ving (28%), Startour (24%), and Apollo (18%). For ISLAND, the categories are Gran Canaria (53%), Tenerife (28%), Fuerteventura (6%), and Lanzarote (13%). TABLE 2 PACKAGE TOUR PRICE BY INDEPENDENT VARIABLES: MULTIPLE REGRESSIONS RESULTS (N = 252) Difference (%) -16.2 3.6 -1.91 7.2 10.0 Model 1 Model 2 Variable Coefficient t-statistic Difference %) Coefficient t-statistic TOUROPA Ving .000 .01 .002 Startour .18 .023 1.28 .020 1.37 Apollo - 160*** -9.05 -14.8 ISLAND - 177*** -11.63 Tenerife .021 1.42 .036*** 2.86 Fuerteventura -.049 -.037 -1.69 Lanzarote .062*** 3.16 6.3 .070*** 4.18 AC .042 1.77 -.007 -.37 BREAK .125*** 4.03 13.3 .096*** REST 3.59 .038* 2.57 3.8 .018 1.44 TV .031* 2.28 3.1 .006 SWIM .55 .027 .019 1.50 EXKITCH .041** 2.71 4.1 .029* RESORT 2.27 .050* 2.47 5.0 .000 BUILT .03 .015 1.03 -.009 3ROOM -110*** -5.10 -10.4 -.109*** -5.91 RESEP .003 .22 -.007 -.59 DISTBEACH -.036*** -4.02 -3.6 STARS -.030*** -3.97 .055*** 9.33 Constant 8.41*** 526.78 8.325*** 502.88 Adjusted R2 .568 Fvalue change in R2 .684 RESET 87.02*** .31 (p = .82) Breusch-Pagan .56 (p = .63) .11 (p = .74) .74 (p = .39) a. Saga = reference category. b. Gran Canaria = reference category.c. Coefficient multiplied with 1,000. *p<.05. p in price models and sun-and-beach package tours: the norwegian case by christer thrane of travel research vol. february author examines popular winter vacation tourist packages to canary islands escape winter. table on page exam shows list variables paper regression results where natural logarithm is used as dependent variable other enter they appear difference expected percent change prices if dummy versus significant which a reliable estimate effects each since logged. model differs from with addition star rating destination hotel an independent variable. d. tour has following attributes: company saga island tenerife at resort built that meters beach. air conditioning on-site restaurant free tv hour reception swimming pool for children. rooms are apartment style bungalow rooms. features not listed here included package. what would be ls predicted krone points study sd sign .139 .270 .204 .454 .500 .470 .436 .329 .281 .450 .495 description mean logprice log ac areas no="0)" .070 break breakfast without surcharge .043 bar .710 rest .484 swim children .746 exkitch extra kitchen equipment machine toaster microwave oven so mm availability minimarket .424 sport facilities squash golf .246 operator own .123 after bung or .035 .087 resep service .567 lift building noise area some="1;" disturbing="2)" .809 distbeach distance beach distshop shopping number apartment-hotel stars .431 .185 .288 .496 .664 .492 note: tourop text have four categories each. ving startour apollo gran canaria fuerteventura lanzarote variables: multiple regressions coefficient t-statistic touropa .000 .01 .002 .18 .023 .020 .021 .036 .062 .042 .125 .096 .038 .018 .031 .006 .55 .027 .019 .041 .029 .050 .03 .015 .003 .22 .055 constant adjusted r2 .568 fvalue .684 reset .31 .82 breusch-pagan .56 .63 .11 .74 .39 a. category. b. category.c. multiplied>