Salsberry Realty sells homes along the east coast of the United States. One of the questions most frequently asked by prospective buyers is: If we purchase this home, how much can we expect to pay to heat it during the winter? The research department at Salsberry has been asked to develop some guidelines regarding heating costs for single-family homes. Three variables are thought to relate to the heating costs: (1) the mean daily outside temperature, (2) the number of inches of insulation in the attic, and (3) the age in years of the furnace. To investigate, Salsberry’s research department selected a random sample of 20 recently sold homes. It determined the cost to heat each home last January, as well as the January outside temperature in the region, the number of inches of insulation in the attic, and the age of the furnace. The sample information is reported in Table 14–1.

The data in Table 14–1 is available in both Excel and MINITAB formats on the student CD. The basic instructions for using Excel and MINITAB for this data are in the Software Commands section at the end of this chapter.
Determine the multiple regression equation. Which variables are the independent variables? Which variable is the dependent variable?
Discuss the regression coefficients. What does it indicate if some coefficients are positive and some coefficients are negative? What is the intercept value? What is the estimated heating cost for a home if the mean outside temperature is 30 degrees, there are 5 inches of insulation in the attic, and the furnace is 10 years old?

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SOLD HOUSE FOR SALE