Problem 2: (22 Points) Show your equationis) and computations for credit Given t

Question

Problem 2: (22 Points) Show your equationis) and computations for credit Given the regression report below is based on a data set for home prices. The objective is to predict the market price in thousands (SK) as a function of square foot (in thousands), size of the garage in number of cars housed, and number of bedrooms. ANOVA 191 328231 45.57668731 5 82186-6 6573 984594 Residual Total 35 5687606548810 Pa4528723154 72336686 1.719857715 .012914179 263713031 52 11134 1.5873079 0B%8766 intercept 54 Feet Garage .0613421 11.18019954 .034431801 4.090100499 147351 72 .039314037 45.16033593 16.70598263 12 25141122 A. Estimate the market price of a home that has the following: 3,000 square ft. of floor space, 3 car garage, 2 bedrooms B. Compute the proportion of the change in the market price of homes that is explained by the estimated regression equation with the chosen regression variables. C. Which chosen regression variable may not be statistically significant (if any) and why?

Explanation / Answer

A) Y= 28.32+45.16X1+7.034X2-1.378X3

X1= 3000 S FT.

X2= 3 CARS

X3= 2 BEDROOMS

Y= 28.32+45.16*3000+7.034*3-1.378*2

Y= 28.32+135480+21.102-2.756

Y= 135529.422-2.756

Y= 135526.666 DOLLARS

B) PROPORTION OF CHANGE IN MARKET PRICE

R^2= The coefficient of determination, R^2which represents the proportion of the variance in the dependent variable that is predictable from the independent variable.

R^2= 1-SSE/SST

= 1-336.56/6910.54

=1-0.0487

=0.9513

C) BEDROOMS ARE NOT STATISTICALLY SIGNIFICANT AT 0.05 LEVEL OF SIGNIFICANCE .

REASON : FROM ABOVE TABLE IF WE SEE THE P VALUE FOR BEDROOMS WHICHIS 0.0817>0.05 WHICH IS NOT SIGNIFICANT.

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