Purchase Solution

Regression Line + Coefficient of Squares in square footage

Not what you're looking for?

Ask Custom Question

1. The data in the table below are the results of a random sample of recent home sales in your neighborhood that your boss has asked you to use to estimate the relationship between the selling price of the house and the number of square feet in it.

Observation Number Sale Price (in thousands) Square Feet (in hundreds)
1 280 20.3
2 328 30.0
3 281 21.5
4 293 25.4
5 263 14.5
6 291 22.3
7 320 31.0
8 256 37.2
9 311 27.1
10 352 30.2
11 288 21.2
12 356 37.2
13 293 23.0
14 272 26.7
15 308 26.5

a. First plot the data, with number of square feet on the "X" axis and the price of the house on the "Y" axis. Explain why housing price is the dependent variable and square feet is the independent variable.
b. What is the estimated regression line? What does the coefficient of square feet represent?
c. Is the sample size large enough for the estimated coefficient of square feet to be statistically significant at the 5% level?
d. What is the coefficient of determination (R2)?
e. Perform an F-test, again at the 5% level.

Purchase this Solution

Solution Summary

The expert uses regression and coefficient of squares to show whether square footage affects home price.

Solution provided by:
  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
Recent Feedback
  • "Thank you so much for your help, it was very helpful to see how you did it in excel. Thanks again!"
  • "Awesome review. Thank you!!!!!"
  • "Wow - Amazing - Thanks"
  • "Thanks"
  • "Thanks for your help. Your solution helps me understand the problem and its solution."
Purchase this Solution

Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.