Jersey Shore Realtors would like to develop a regression model to help it set weekly rental rates for beach properties during the summer season in New Jersey. The independent variables for this model are the number of bedrooms a property has, its age, the number of blocks away from the ocean it is, and the rental month (June, July, or August). These data can be found in the Excel file Jersey Shore Realtors 2.xlsx for randomly selected rental properties.
a. Using PHStat, construct a regression model using all of the independent variables.
b. Test the significance of the overall regression model using α = 0.05.
c. Interpret the meaning of each of the regression coefficients for the dummy variables.
d. Using the p values, identify which independent variables are significant with α = 0.05.
e. Construct a regression model using only the significant variables found in part d and predict the average weekly rental rate during the month of August for a three bedroom house that is 12 years old and two blocks from the ocean.