a county real estate appraiser (full question in photo) A county real estate app

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a county real estate appraiser (full question in photo) A county real estate appraiser wants to develop a statistical model to predict the appraised value of houses in a section of the county called East Meadow. One of the many variables thought to be an important predictor of appraised value is the number of rooms in the house Consequently, the appraiser decided to fit the linear regression model E(y) = beta_0 + beta_1 x. where y equals the appraised value of the house (in thousands of dollars) and x equals the number of rooms. Using data collected for a sample of n = 74 houses in East Meadow, the following result was obtained y = 74.80 + 18 86x Give a practical interpretation of the estimate of the slope of the least squares line. A. For each additional room in the house, we estimate the appraised value to increase $74, 800. B. For each additional dollar of appraised value, we estimate the number of rooms in the house to increase by 18.86 C. For a house with 0 rooms, we estimate the appraised value to be $74, 800. D. For each additional room in the house, we estimate the appraised value to increase $18, 860.

Explanation / Answer

Here, Estimate of slope=18.86

Slope corresponding to independent variable in simple linrear regression is interpreted as it is change (increase or decrease depending on + or - sign resp.) in dependent variable upon increasing one unit in independent variable.

Answer of this question is option D.For each addtional room in the house , we estimate the appraised value to increase $18,600.

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