A real estate analyst estimates the following regression, relating a house price

Question

A real estate analyst estimates the following regression, relating a house price to its square footage (Sqft): Use Table 4.

In an attempt to improve the results, he adds two more explanatory variables: the number of bedrooms (Beds) and the number of bathrooms (Baths). The estimated regression equation is

Choose the appropriate hypotheses to determine whether Beds and Baths are jointly significant in explaining Price.

Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

At the 5% significance level, find the critical value. (Use the appropriate Excel function to calculate the critical value. Round your answer to 2 decimal places.)

A real estate analyst estimates the following regression, relating a house price to its square footage (Sqft): Use Table 4.

Explanation / Answer

a) Option A is Correct. H0: ?2 = ?3 = 0; HA: At least one of the coefficients is nonzero.

b) Test Statistic = 16.08/SQRT(50)

= 2.27

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