Question

A random sample of 22 residential properties was used in a regression of price on nine different independent variables. The variables used in this study were as follows:
PRICE = selling price (dollars)
BATHS 5 number of baths (powder room = 1/ 2 bath)
BEDA = dummy variable for number of bedrooms (1 = 2 bedrooms, 0 = otherwise)
BEDB = dummy variable for number of bedrooms (1 = 3 bedrooms, 0 = otherwise)
BEDC = dummy variable for number of bedrooms (1 = 4 bedrooms, 0 = otherwise)
CARA = dummy variable for type of garage (1 = no garage, 0 = otherwise)
CARB = dummy variable for type of garage (1 = one- car garage, 0 = otherwise)
AGE = age in years
LOT = lot size in square yards
DOM = days on the market
In this study, homes had two, three, four, or five bedrooms and either no garage or one- or two- car garages. Hence, we are using two dummy variables to code for the three categories of garage. Fit a full regression model ( nine independent variables), and then estimate the average difference in selling price between
a. Properties with no garage and properties with a one- car garage.
b. Properties with a one- car garage and properties with a two- car garage.
c. Properties with no garage and properties with a two- car garage.


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  • CreatedNovember 21, 2015
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