GENERAL NOTE: Questions 6 through 8 are all based on this second regression. Mov
ID: 3437164 • Letter: G
Question
GENERAL NOTE: Questions 6 through 8 are all based on this second regression.
Moving to Chapter 14 material (but still using the same Excel file), run one regression with “Selling Price” as the Y input and the following five variables as X variables:
- Number of Baths
- Number of Bedrooms
- Pool (dummy) – 1 indicates “pool”; 0 indicates “no pool”
- Garage (dummy) – 1 indicates “garage”; 0 indicates “no garage”
- Distance to Town Center
Which of the following interpretations of the coefficient on the “Number of Bedrooms” variable is correct?
On average, the selling price of a house will increase by approximately $153,678 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $2,408 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will decrease by approximately $9,467 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $153,678 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $2,408 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will decrease by approximately $9,467 for an additional bedroom (holding the other four variables constant).
Selling Prices of Houses and Related Information Selling Price (in $) Size (in square feet) Number of Baths Number of Bedrooms Pool (dummy) Garage (dummy) Distance to Town Center 221100 2300 1.5 3 1 0 18 266600 2400 2 4 0 1 13 292400 2100 2 4 0 1 14 213600 2200 2.5 2 0 0 16 139900 2100 1.5 2 0 0 28 245400 2100 2 2 1 1 12 327200 2500 2 6 0 1 15 271800 2100 2.5 2 0 1 9 221100 2300 1.5 3 1 0 18 266600 2400 2 4 0 1 13 292400 2100 2 4 0 1 14 209000 1700 1.5 2 0 1 8 270800 2500 2 6 0 1 7 246100 2100 2 4 0 1 18 194400 2300 2 2 0 0 11 281300 2100 2 3 0 1 16 172700 2200 2 4 1 0 16 207500 2300 2.5 5 1 0 21 198900 2200 2 3 1 1 10 209300 1900 2 6 1 1 15 252300 2600 2 4 0 1 8 192900 1900 2.5 4 1 1 14 209300 2100 1.5 5 0 0 20 345300 2600 2 8 0 1 9 326300 2100 3 6 0 1 11 173100 2200 1.5 2 1 1 21 187000 1900 2 2 0 0 26 257200 2100 2 2 0 1 9 233000 2200 1.5 3 0 1 14 177100 1900 2 2 0 1 10 182700 2000 2.5 4 1 0 14 216000 2300 2 4 0 0 19 312100 2600 2.5 6 0 1 7 199800 2100 2 3 0 1 19 273200 2200 3 5 0 1 16 206000 2100 1.5 3 1 0 9 232200 1900 1.5 3 1 1 16 198300 2100 1.5 4 1 1 19 205100 2000 2 3 1 0 20 175600 2300 2 4 1 1 24 307800 2400 3 3 1 1 21 269200 2200 3 5 0 1 8 224800 2200 2.5 3 0 1 17 171600 2000 2 3 1 0 16 216800 2200 2 3 0 1 15 192600 2200 2 6 1 0 14 236400 2200 2 5 0 1 20 172400 2200 2 3 0 0 23 251400 1900 2 3 0 1 12 246000 2300 3 6 0 1 7 147400 1700 2 6 1 0 12 176000 2200 2 4 0 1 15 228400 2300 1.5 3 0 1 17 166500 1600 2.5 3 1 0 19 189400 2200 2 4 0 1 24 312100 2400 3 7 0 1 13 289800 2000 3 6 0 1 21 269900 2200 2.5 5 1 1 11 154300 2000 2 2 0 0 13 222100 2100 2 2 0 1 9 209700 2200 2 5 1 1 13 190900 2200 2 3 1 1 18 254300 2500 2 4 1 1 15 207500 2100 2 3 1 0 10 209700 2200 2 4 1 1 19 294000 2100 2.5 2 0 1 13 176300 2000 2 2 1 0 17 294300 2400 2 7 0 1 8 224000 1900 2 3 1 1 6 125000 1900 1.5 2 0 0 18 236800 2600 2 4 1 1 17 164100 2300 2 4 0 0 19 217800 2500 2 3 0 0 12 192200 2400 2.5 2 0 0 16 125900 2400 1.5 2 0 0 28 220900 2300 2 2 1 1 12 294500 2700 2 6 0 1 15 253200 2300 2 3 0 1 16 155400 2400 2 4 1 0 16 186700 2500 2.5 5 1 0 21 179000 2400 2 3 1 1 10 188300 2100 2 6 1 1 15 227100 2900 2 4 0 1 8 173600 2100 2.5 4 1 1 14 188300 2300 1.5 5 0 0 20 310800 2900 2 8 0 1 9 293700 2400 3 6 0 1 11 179000 2400 2 3 0 1 8 188300 2100 2.5 6 1 1 14 227100 2900 1.5 4 0 0 20 173600 2100 2 4 0 1 9 188300 2300 3 5 0 1 11 254300 2500 2 4 1 1 15 207500 2100 2 3 1 0 10 209700 2200 2 4 1 1 19 294000 2100 2.5 2 0 1 13 176300 2000 2 2 1 0 17 294300 2400 2 7 0 1 8 224000 1900 2 3 1 1 6 125000 1900 1.5 2 0 0 18 236800 2600 2 4 1 1 17 164100 2300 2 4 0 0 19 173600 2100 2.5 4 1 1 14 188300 2300 1.5 5 0 0 20 310800 2900 2 8 0 1 9 293700 2400 3 6 0 1 11Explanation / Answer
By using Minitab, the regression equation is:
Selling Price (in $) = 153678 + 17957 Number of Baths + 9467 Number of Bedrooms
- 22453 Pool (dummy) + 38228 Garage (dummy)
- 1479 Distance to Town Center
The coefficient for Number of Bedrooms is 9467. The following interpretations of the coefficient on the “Number of Bedrooms” variable is correct:
"On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant)."
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