Below is some of the regression output from a regression of the amount rental ho

Question

Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of $'s) based on the size of the house (expressed in square feet), whether the house has an ocean front view (VIEW = 1 if it has an ocean front view and = 0 if not), and an interaction term between the ocean front view dummy variable and the size of the house. If the estimated equation is Price = 1,251 + 0.34*Size + 1,538*View + 0.07*(Size*View) How much more (or less) does a 3600 square foot house that has an ocean front view rent for compared to a similar sized house without an ocean front view? (if the ocean front house rents for more then express your answer as a POSITIVE number; if the ocean front house rents for less then express your answer as a NEGATIVE number) (please express your answer using 1 decimal places)

Explanation / Answer

the estimated equation is,

Price = 1,251 + 0.34*Size + 1,538*View + 0.07*(Size*View)

for size=3600, then price(ocean front view=1)=1,251 + 0.34*3600 + 1,538*1 + 0.07*(3600*1)=4265

for size=3600, then price(non-ocean front view=0)=1,251 + 0.34*3600 + 1,538*0 + 0.07*(3600*0)=2475

ocean front view rent =4265

without ocean front view rent=2475

difference=4265-2475=1790

therefore ocean front view has 1790 more rent than without ocean front view

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