Question

5. A sample of 30 houses that were sold in the last year was taken. The value of the house (y, in dollars) was estimated. The independent variables included in the analysis were the number of rooms (xi), the size of the lot (x2, in sq ft), the number of bathrooms (x3), and a dummy variable (x4), which equals 0 if the house does not have a garage and equals 1 otherwise. The following regression results were obtained: Intercept Coefficients 530.88 1.25 1.2 2.2 1157.8 Standard Error 62.5 0.09 0.2 1.3 63.1 a) Please fill out the ANOVA table appropriately. ANOVA SS Source of Variation of MS F value 304.58 Regression Residual (Error) Total 410.22 b) Write down the estimated regression equation. c) Fully interpret the meaning of the coefficient of dummy variable (x4).

Ignore Number 6

Answer 1

JW Ans? (a) Source of SS MS fralue varietion Roaression 4 304.58 308.58/4=76:15 76.15 doo 2 18.04. Residual 10564 10564/25= 4:2256 4:22 Total 29 410:22 (b) estimated Regresion equation 9- Sóa-88 + 1 3 S + J3Yt4 (3 + UST: 8 x (0) Interpretation of dummy rauable If the house have a garage, then there is 11578 encrease in the ralue of the house. if 4139, = 7560, K3=2, janegary)=). ŷ = 530.88+ 125x9+1.2x7500+8-2X2 +1157,8 x 1 ŷ = 10704.33 -