Question

The following data on sale price, sire, and land-to-building ratio for 10 large industrial properties appeared in a paper Sale Price Size Land-to- (millions (thousands Building Property of dollars) of sq. ft.) Ratio 107 2166 2.2 30.4 2421 1.7 224 19.9 3917 10.0 6.6 2866 1699 1010 1107 106 4.9 10 4.6 123 (a) Calculate the value of the correlation coefficient between sale price and size (Give the answer to three decimal places) (1) Calculate the value of the correlation coefficient between sale price and land to building ratio (Give the answer to three decimal places.) (C) If you wanted to predict sale price and you could use either size or land-to-building ratio as the basis for making predictions, which would you use? Sie Land-to-building ratio (d) Based on your choice in Part (c), find the equation of the least squares regression line you would use for predicting y sale price (Give animers to three decimal places

Answer 1

using minitab>stat>basic stat>correlation

we have

Correlation: Sale price, Size

Pearson correlation of Sale price and Size = 0.702
P-Value = 0.024

Correlation: Sale price, Land to building ratio

Pearson correlation of Sale price and Land to building ratio = -0.328
P-Value = 0.354

using minitab>stat>basic stat>Regression
Regression Analysis: Sale price versus Size

The regression equation is
Sale price = 1.331 + 0.005246 Size

S = 6.66007 R-Sq = 49.3% R-Sq(adj) = 42.9%

Analysis of Variance

Source DF SS MS F P
Regression 1 344.792 344.792 7.77 0.024
Error 8 354.852 44.357
Total 9 699.644

a ) r = 0.702

b ) r= -0.328

c ) we will use size

d )
y= 1.331 + 0.005x