# Regression Analysis: Interpretation of regression equation

Suppose the regression equation that has been used to estimate the value of existing homes is as follows;

Value = 10,000 + 50X1 + 5X2 + 10,000X3

Where;

X1 is square feet of livable area

X2 is the size of the lot measured in square feet

X3 is an indicator variable for the presence of a pool (1 if yes, 0 if no)

a. Interpret the meaning of the slopes of this equation.

b. Estimate the value of a home with 2,000 square feet of livable area, 10,000 square foot lot, and a pool.

https://brainmass.com/statistics/regression-analysis/regression-analysis-interpretation-regression-equation-188306

#### Solution Preview

a. Interpret the meaning of the slopes of this equation.

Value of the home increases by

50 for every square feet increase in ...

#### Solution Summary

The solution interprets a regression equation. It interpret the meaning of the slopes of the equation and using the equation estimates the value of a home.