Which of the variables in the model are related to Market? Justify your answer.

Question

Which of the variables in the model are related to Market? Justify your answer.

Choose the best answer from the following:

i) Since the p-values for the variable SqFt, SqFt**2, Grade, and Assessed are all less than .05 all the variables are needed in the model and have a relation to Market. The regression equation is Market = 3.49 + 0.0474 sgFt - 0.000016 (SajFt)**2 + 3.16 Grade + 0.235 Assessed Predictor Constant SqFt (SqFt) **2 -0.00001635 0.00000364-4.49 0.000 Grade Assessed Coef 3.490 0.047388 SE Coef 4.6560.75 0.457 0.008069 5.870.000 3.1564 0.23548 0.9222 3.42 0.001 0.07019 3.35 0.001 S 2.76470 R-sq 79.9% R-Sq ( adj ) -78.4% - - Analysis of Variance DF MS Source Regression Residual Error 55 420.40 Total 4 1672.00 418.00 54.69 0.000 7.64 59 2092.40

Explanation / Answer

As we can see from the ANOVA data table that  the p-values for the variable SqFt, SqFt**2, Grade, and Assessed are all less than 0.05

so, we can say that all the variables are needed in the model and have a relation to Market because their respective p values are less than 0.05

Here we will include variable SqFt**2 because its significant and it has at least some effect on the Dependent variable irrespective of its small coefficient.

we are only looking at the relationship between the dependent variable and independent variables, so we need to only focus on the p values and not on the coefficient values.

coefficient values are important only when we focus on the change in dependent variable due to independent variables.

so, option A is correct answer

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