Test 5 3) A county real estate appraiser wants to develop a statistical model to

Question

Test 5 3) 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 decidec tofit the simple linear regression model,y=R+ , where v-appraised value of the house (in Sthousands) and x- number of rooms. Using data collected fora sample of n= 74 houses in. East Meadowr.thefollowinR fesults- 74.80+19,72 3 7 1.24.1.03( for testing s= 2.631-7.49(fortesting .) SSE " 60, 775, MSE = 84 1.5 29..:-044 Range of the x-values: 5-11 Range of the y-values: 160-300 Give the practical interpretation of the estimate of the y intercept of the least squares line.

Explanation / Answer

The y - intercept of 74.8 here represents the fixed price that is to be given on any value of the game irrespective of the number of rooms in the house. This is the required interpretation of the y intercept here. So basically whatever the number of rooms be, this is the fixed price that has to be added in the value of the house.

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