Scribd Logo
Upload

Welcome to Scribd!

  • 164 views

    Subject Rea Lan

    Uploaded by

    OilandGas IndependentProject
    Steve Caples developed a regression model to appraise residential housing in Lake Charles, Louisiana. The model predicts housing price (Y) based on square footage (X) using the equation Ŷ = 13,473 + 37.65X. It had a coefficient of correlation of 0.63 based on recently sold homes in a neighborhood. The model predicts a house that is 1,860 square feet would sell for $71,089.50, but a house of that size recently sold for $95,000, indicating the model underestimated the price. Multiple regression could include additional variables like number of bedrooms to improve the model.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Subject Rea Lan

    Uploaded by

    OilandGas IndependentProject
    164 views2 pages
    Steve Caples developed a regression model to appraise residential housing in Lake Charles, Louisiana. The model predicts housing price (Y) based on square footage (X) using the equation Ŷ = 13,473 + 37.65X. It had a coefficient of correlation of 0.63 based on recently sold homes in a neighborhood. The model predicts a house that is 1,860 square feet would sell for $71,089.50, but a house of that size recently sold for $95,000, indicating the model underestimated the price. Multiple regression could include additional variables like number of bedrooms to improve the model.

    Original Description:

    yiyit

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Steve Caples developed a regression model to appraise residential housing in Lake Charles, Louisiana. The model predicts housing price (Y) based on square footage (X) using the equation Ŷ = 13,473 + 37.65X. It had a coefficient of correlation of 0.63 based on recently sold homes in a neighborhood. The model predicts a house that is 1,860 square feet would sell for $71,089.50, but a house of that size recently sold for $95,000, indicating the model underestimated the price. Multiple regression could include additional variables like number of bedrooms to improve the model.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    164 views2 pages

    Subject Rea Lan

    Uploaded by

    OilandGas IndependentProject
    Steve Caples developed a regression model to appraise residential housing in Lake Charles, Louisiana. The model predicts housing price (Y) based on square footage (X) using the equation Ŷ = 13,473 + 37.65X. It had a coefficient of correlation of 0.63 based on recently sold homes in a neighborhood. The model predicts a house that is 1,860 square feet would sell for $71,089.50, but a house of that size recently sold for $95,000, indicating the model underestimated the price. Multiple regression could include additional variables like number of bedrooms to improve the model.

    Copyright:

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

    4-16

    Steve Caples, a real estate appraiser in Lake Charles, Louisiana,


    has developed a regression model to help appraise residential
    housing in the Lake Charles area. The model was developed
    using recently sold homes in a particular neighborhood. The
    price (Y) of the house is based on the square footage (X) of the
    house. The model is

    Ŷ = 13,473 + 37.65X

    The coefficient of correlation for the model is 0.63.


    (a) Use the model to predict the selling price of a house that is
    1,860 square feet.
    (b) A house with 1,860 square feet recently sold for $95,000.
    Explain why this is not what the model predicted.
    (c) If you were going to use multiple regression to develop an
    appraisal model, what other quantitative variables might be
    included in the model?
    (d) What is the coefficient of determination for this model?
    Let X1= the number of pounds of beef in each pound of dog food
    X2= the number of pounds of grain in each pound of dog food
    Minimize. 90X1+.60X2 (minimize cost per pound of dog food)
    Subject to: X1+X2=1 (total weight should be one pound)
    10X1+6X2≥9 (at least 9 units of vitamin 1 in a pound)
    12X1+9X2≥10 (at least 10 units of vitamin 2 in a pound)
    X1, X2≥0 (non-negativity constraints)
    Optimal Solution: X1= .75 X2= .25 Cost = $.825

    You might also like