You live in the suburbs where the HOA (Home Owners Association) wanted to examine the relationship between the size of a home in the HOA (measured in the number of rooms in the house), and the selling price of the house (in thousands of $). Also, the HOA is divided into 2 parts, one part of it is on the east side of the community and the other part is on the west side of the community. The east side is designated as a 0 and the west side of the community is designated as a 1. The HOA examined a collection of 20 homes in the community and the information is listed in columns C4, C5 and C6.

Your managerial report must include, at least, the following items.

1.Determine the multiple regression model that will help the HOA predict the selling price, based on the number of rooms and the side of the community where the home is located.

2.Interpret ALL of the regression coefficients and explain what they mean.

3.Predict the mean selling price for a home with 8 rooms that is located on the west side of the community.

4.Determine if the 2 independent variables are statistically significant at the .05 level of significance. If either one is not significant, remove it from the model and re-run the regression analysis with only the significant independent variable.

5.Is your final model a good model? Explain in detail. Make sure to include the r-squared and adjusted r-squared values in your interpretation.

6.Name 2 other independent variables that the HOA might consider using in their prediction of the price of a home in the community. Explain why these 2 independent variables might be useful in their model for helping to predict the home prices in the community.

Price Rooms Neighborhood

309.6 7 0

307.4 8 0

340.3 9 0

346.5 12 0

298.2 6 0

337.8 9 0

324.1 10 0

313.2 8 0

327.8 9 0

325.3 8 0

308.5 6 1

381.3 13 1

337.4 10 1

346.2 10 1

342.4 9 1

323.7 8 1

329.6 8 1

343.6 9 1

360.7 11 1

348.3 9 1