12.12 Predicting house prices For the House Selling Prices FL data file on the book’s website, MINITAB results of a regression analysis are shown for 100 homes relating y = selling price (in dollars) to x = the size of the house

(in square feet).

a. Using this output, go through all steps of a significance test of independence (testing whether the population slope equals 0) by (i) mentioning the necessary assumptions for inferences to be valid, (ii) stating the hypotheses,

(iii) giving the value of the test statistic, (iv) stating the P-value, and (v) writing a conclusion.

b. Show that a 95% confidence interval for the population slope is (64, 90). (Hint: The t-score with df = 98 equals 1.984.)

c. A builder had claimed that the selling price increases

$100, on average, for every extra square foot. Based on part

b, what would you conclude about this claim?

Transcribed Image Text:

House selling prices and size of home Term Coef SE Coef T-Value P-Value Constant 9161 10760 0.85 0.397 size 77.01 6.63 11.62 0.000