Regression Analysis Assignment

1. Open the Excel file below HPRICE.XLS

2. Estimate a regression model with sale price as the dependent (y) variable using the following independent (x) variables:

1. Lot size

2. Number of bedrooms

3. Number of bathrooms

QUESTION I:  Estimate the change in a home’s sale price if lot size increases by 1 square foot, holding all else constant. Is the estimate statistically significant?

 

Enter your answer on the Canvas text entry box. Label it Q1

 

3. Now run the same regression as before, but include the following dummy variables

1. Does the house have a garage? (1 if yes, 0 otherwise) NOTE: You will need to create this dummy based on #garages

2. Does the house have air conditioning? (1 if yes, 0 otherwise)

3. Is the house in a desirable location? (1 if yes, 0 otherwise)

 

QUESTION II: Which of the three dummy variable coefficients are statistically significant?

 

Enter your answer on the Canvas text entry box. Label it Q2

 

QUESTION III: What is the predicted sale price for a 3 bedroom, 2 bath home on a 5,100 square foot lot that has air conditioning and a garage, but is NOT in a desirable location?

 

Enter your answer on the Canvas text entry box. Label it Q3