This is the least squares regression analysis to predict assessed value based on

Question

This is the least squares regression analysis to predict assessed value based on the full set of available independent variables. The regression equation is VALUE = 127-0.895 LOTS!ZE- 10.2 BED + 30.4 BATH + 6.69 ROOMS + 0.240 AGE42.5 CAC 5.27 FIREPL Predictor Constant LOTSIES BSD BATH StDev 25.47 0.9495 5.430 7.612 3.754 0.2638 14.89 8.077 0.000 ?. 350 -1.88 0.066 0.000 .78 0.080 0.366 0.006 -0.65 0.517 127.11 -0.8955 -20.214 30.359 0.94 6.694 AGE CAC FIREPL 0.2404 42.52 -5.266 s 25.78 R-sq 44.9t R-Sq ( adj) 37.5% - = Analysis of Variance DF 7 MS 3.3 664.4 402 6.06 0.000 Regression Residual Brror 32 34550.3 Total 28163.0 62713.2 Unusual observations Obs Fit StDev Fit Residual St Resid LOTSIZB 31.5 12.0 VALUE 299.90 189.90 215.00 100.00 305.00 212.35 176.24 164.02 147.21 254.90 21.89 7.08 17.61 14.14 87.55 13.66 50.98 -47.21 50.10 3.59R 1.00 X 2.06R -2.51RX 2.32R 35 12.1 R denotes an observation with a large standardized residual x denotes an observation whose X value gives it large influence. 14. The coefficient of the air conditioning variable (CAC) is 42.5. Assuming no change in the a) it is estimated that houses with CAC are assessed $42.50 higher than those without c) it is estimated that houses with CAC are assessed $42.50 lower than those without other independent variables, the correct interpretation of this coefficient is b) it is estimated that houses with CAC are assessed $42,500 higher than those without d) it is estimated that houses with CAC are assessed $42,500 lower than those without 15. The margin of error for the coefficient of the air conditioning variable (CAC) is approximately a) $15000 b) $25000 c) $30000 d) $50000 16. It is desired to simplify the analysis by removing one variable from the analysis. Based on statistical considerations, which of the following is the best candidate for removal? (Use a significance level of.10.) a) fireplace b) CAC c) number of bathrooms d) number of bedrooms

Explanation / Answer

14]

The coefficient of air conditioning variable ( CAC) is 42.5. Assuming no change with others independent variables, the correct interpretation of this coefficient is

a] it is estimated that houses with CAC are assessed $ 42.5 higher than those without.

15]

The margin of error for the coefficient of air conditioning variable ( CAC) is approximately

a] $15000 because its margin of error is 14.89

16]

At 0.10 level of significance, the best candidate for removal is a) fireplace. Because corresponding p-value is greater than 0.1. Hence we do not reject null hypothesis.

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