Referring to Table 15-2, to determine if there is significant linear effect of p

Question

Referring to Table 15-2, to determine if there is significant linear effect of property size on the sale price, what is p-value?

a.0.0715

b.0.2204

c.0.0661

d.0.0594

a.0.0715

b.0.2204

c.0.0661

d.0.0594

TABLE 15-2 In Hawaii, condemnation proceedings are under way to enable private citizens to own the property that their homes are built on. Until recently, only estates were permitted to own land, and homeowners leased the land from the estate. In order to comply with the new law, a large Hawaiian estate wants to use regression analysis to estimate the fair market value of the land. The following model was fit to data collected for n = 20 properties, 10 of which are located near a cove. Model 1: Y = Bo + B1X1 + B2x2 + P3X1X2 + Bax + Psx=x2 + € where Y = Sale price of property in thousands of dollars X1 = Size of property in thousands of square feet X2 = 1 if property located near cove, 0 if not Using the data collected for the 20 properties, the following partial output obtained from Microsoft Excel is shown: SUMMARY OUTPUT Regression Statistics Multiple R 0.985 R Square 0.970 Standard Error 9.5 Observations 20 ANOVA MS F SEus SS 28324 1279 29063 Regression Residual Total 5664 91 62.2 Signif F 0.0001 Intercept Size Cove Size*Cove SizeSq SizeSq*Cove Coeff - 32.1 12.2 - 104.3 17.0 - 0.3 - 0.3 StdError 35.7 5.9 53.5 8.5 t Stat - 0.90 2.05 - 1.95 1.99 - 1.28 - 1.13 P-value 0.3834 0.0594 0,0715 0.0661 0.2204 0.2749 0.2 0.3

Explanation / Answer

To determine if there is significant linear effect of property size on the sale price we check for p-value of
Size . It is .0594

We don't check for p-value of SizeSq variable' p-value, as SizeSq is for checking non-linear relation and not linear relationship with Price

D is the right answer

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