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    Project Part C (Final)

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    nirmitshelat
    This document contains a multiple linear regression analysis relating house selling price to property taxes, house size, lot size, and attractiveness index using data from 30 properties. The regression equation found that selling price increases with house size and lot size, and decreases with taxes. It predicts a selling price of $433,650 for a 2,900 sqft home on a 2.5 acre lot with $6,000 in taxes and a 45 attractiveness index. The model explains 72.1% of variation in selling price, and lot size is estimated to increase selling price by $44,400 for each additional acre.

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    Project Part C (Final)

    Uploaded by

    nirmitshelat
    98 views2 pages
    This document contains a multiple linear regression analysis relating house selling price to property taxes, house size, lot size, and attractiveness index using data from 30 properties. The regression equation found that selling price increases with house size and lot size, and decreases with taxes. It predicts a selling price of $433,650 for a 2,900 sqft home on a 2.5 acre lot with $6,000 in taxes and a 45 attractiveness index. The model explains 72.1% of variation in selling price, and lot size is estimated to increase selling price by $44,400 for each additional acre.

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    project c

    Original Title

    Project Part C(Final)

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    This document contains a multiple linear regression analysis relating house selling price to property taxes, house size, lot size, and attractiveness index using data from 30 properties. The regression equation found that selling price increases with house size and lot size, and decreases with taxes. It predicts a selling price of $433,650 for a 2,900 sqft home on a 2.5 acre lot with $6,000 in taxes and a 45 attractiveness index. The model explains 72.1% of variation in selling price, and lot size is estimated to increase selling price by $44,400 for each additional acre.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    98 views2 pages

    Project Part C (Final)

    Uploaded by

    nirmitshelat
    This document contains a multiple linear regression analysis relating house selling price to property taxes, house size, lot size, and attractiveness index using data from 30 properties. The regression equation found that selling price increases with house size and lot size, and decreases with taxes. It predicts a selling price of $433,650 for a 2,900 sqft home on a 2.5 acre lot with $6,000 in taxes and a 45 attractiveness index. The model explains 72.1% of variation in selling price, and lot size is estimated to increase selling price by $44,400 for each additional acre.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    Name: ______________

    Applied Managerial Statistics

    Prof. Safe

    Multiple Linear Regression Worksheet

    Answer All questions


    Work Independently

    A real estate expert was interested in developing a regression model that relates the selling price (in thousand of
    dollars) of properties to characteristics of the properties. Data were available on 30 properties that were sold
    recently. The expert developed a long list of possible explanatory variables. After a careful screening, it was
    decided that the following four characteristics should be considered.
    Variable
    x1
    x2
    x3
    x4

    Description
    Property taxes (annual taxes in dollars)
    House size (floor area in square feet)
    Lot size (in acres)
    Attractiveness Index

    Regression Analysis: Selling Price versus Taxes, House, Lot, Attract


    The regression equation is
    Selling Price = 11.8 - 0.0233 Taxes + 0.109 House + 44.4 Lot + 2.99 Attract
    Predictor
    Constant
    Taxes
    House
    Lot
    Attract

    Coef
    11.83
    -0.02331
    0.10948
    44.40
    2.9926

    S = 32.13

    SE Coef
    66.32
    0.02056
    0.02442
    21.76
    0.6589

    R-Sq = 72.1%

    T
    0.18
    -1.13
    4.48
    2.04
    4.54

    P
    0.860
    0.268
    0.000
    0.052
    0.000

    R-Sq(adj) = 67.7%

    Analysis of Variance
    Source
    Regression
    Residual Error
    Total

    (a)

    DF
    4
    25
    29

    SS
    66827
    25815
    92641

    MS
    16707
    1033

    F
    16.18

    P
    0.000

    Write out the general Multiple linear regression model for this problem with the variables
    where Y = selling price of properties
    Y=B0+B1X1+B2X2+B3X3+B4X4+E
    Write out the estimated (least-squares) regression line for this problem.

    (b)

    Selling Price = 11.8 - 0.0233 Taxes + 0.109 House + 44.4 Lot + 2.99 Attract

    (c)

    Use the estimated regression line to predict the average selling price of 2900 square-foot homes on a 2.5acre lot with $6000 in annual property taxes and an attractive index of 45.

    .099

    Selling Price = 11.8 - 0.0233(6000) + 0.109(2900) + 44.4(2.5) + 2.99(45)


    = 433.65
    So, the predicted average selling price is $433,650 dollars.

    Name: ______________
    (d)

    Applied Managerial Statistics

    Prof. Safe

    What is the b3 slope estimate in terms of this problem?

    b3 = 44.40.
    So, given that taxes, house size and attractiveness index remain fixed, then for every acre increase in lot size, we predict that
    the average selling price of the house will increase by $44,400 dollars.

    (e)

    What is the correlation coefficient determined by the multiple linear regression model using taxes, house
    size, lot size, and attractiveness as predictors?
    67.7 %

    (f)

    What percentage of variation in selling price is explained by the multiple linear regression model using taxes,
    house size, lot size, and attractiveness as predictors?

    72.1 %
    (g)

    State your decision regarding the null hypothesis about the slope b 3 in (d). (Use
    (Accept or reject Ho) Explain

    = 0.05)

    Reject H0, The evidence suggests that there is a linear relationship between house selling price and at least one of
    taxes, house size, and lot size or attractiveness index.
    (h)

    If we Calculate the 95% confidence interval for

    and got the following :

    B2 +t25*SEB2=0.10948-+2.06(0.02442)
    = (0.0592.0.1598)
    How would you interpret the C.I. in part (h) in terms of the problem?
    We are 95% confident that for every increase in house size while taxes, lot size and attractiveness index remain fixed, that
    the mean house selling price increases by $59 to $160.

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