A. State the multiple regression equation B. Interpret the meaning of the slopes

Question

A. State the multiple regression equation B. Interpret the meaning of the slopes b1 and b2 in the excel sheet problem C. Explain why the regression coefficient, b0, has no practical meaning in the context of this problem D. predict the mean fair market value for a house that has a land area of .25 acre and is 55 years old. GlenCove-Excel File Home InsertPage Layout Formulas Data Review View Tell me what you want to do 1 UPDATES AVAILABLE Updates for Office are ready to be installed, but finst we need to close some apps Update now Fair Market Property Size House Size Age (square feet) Rooms Baths Garage SUMMARY OUTPUT 95ramore Road 3 21 Jefferson St 4 38 Hitching Post Lane5392 514 Poppy Lane 6 5 Daniel Drive 0.2297 56 4250 02192 61 1630 39 04608 28 49040.2549 56 19427 25 2073 532Regression Stetistics -hlutpe R 0 835939 R Square 0.698795 Adusted F 0 676483 Standard E 82 08292 15 Francis Terrace 0.1808 58 0.5015 17 0.222962 756.80.1300 25 89.00.1763 64 13100 62 02520 56 01148 22 0.1693 74 23 Guilfoy Street 9 17 Carlyle Drive 018Craft Avenue 7779 3471· 12, 14 Fox Street 13 1 Raynham Road 14 2 Jerome Drive 15 7 Valentine Street se 38 Jefferson Street 7 15 Inwood Road gificance F 2 4220429 2110214 31.31994 9.22E-08 27 1819154 6737 606 29 603958 2 1006 2 Resdual 4522 4124 34301714 62 3849 54 64400.6545 56 3878 0.1722 62 99.8 01435 88 3564 02755 81 34590.1148 307 1822 6 21 2479 6 25 imercept 532 2683 48 66608 10.93757 2016.11 432 4338 632 1428 432 4338 632 1428 Property S 407 1346 64.80282 6282667 101-08 274 1702 540 099 274 1702 540 099 2 82571 0881302 4.14752 0.000299 422363 1.4278 422363 14278 29 Meadowfield Lane 19 13 Westiand Drive 20 79 Valentine Street 21 Fairmont Place 22 1 Prestwick Terrace 23 11 Clement Street 24 7 Woodland Road 2080 11 2 0 5418 0 3636 5 388.0 2536 Elm Avenue 2050 10 2 2978 6 252 0.1474 51 . 26 17 Duke Place 444 04626 92 12 Prospect Avenue 23 1 Buckeye Road 29 30 Ann Strees 0 26 Broadfield Piace 4173 0.1889 64 0.1228 54 129 51 01492 4 DATA

Explanation / Answer

a) Here from the coefficient column of the last table, the multiple linear regression equation obtained will be:

Fair market value = 532.2883 + 407.1346*(Property Size) - 2.82571*(Age)

b) The 2 slope coeffcients here represents:

For property size we see that the coefficient is positive which means that as there is an increase in 1 unit of property size, there is expected to be an increase in 407.1346 units of fair market value.

For Age variable, we see that the coefficient is negative, therefore for an increase of 1 unit in Age, there would be a decrease here of 2.82571 units.

c) The intercept does not really have a significance here because, age and property size clearly cannot be 0 and therefore intercept has no interpretation here.

d) We use the regression equation to predict the fair market value as:

Fair market value = 532.2883 + 407.1346*(Property Size) - 2.82571*(Age)

Fair market value = 532.2883 + 407.1346*(0.25) - 2.82571*(55)

Fair market value = 532.2883 + 101.78365 - 155.41405 = 478.6579

Therefore the predict fair market value is 478.6579

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