Real-estate investors, home buyers, and homeowners often use the appraised value of property as a basis for predicting the sale of that property. Data on sale prices and total appraised value of 78 residential properties sold recently in an upscale Tampa, Florida, neighborhood named Hunter€™s Green are saved in the HUNGREEN file. Selected observations are listed in the accompanying table.

a. Propose a straight-line model to relate the appraised property value (x) to the sale price (y) for residential properties in this neighborhood.
b. A MINITAB scatterplot of the data with the least squared line is shown at the top of the printout below. Does it appear that a straight-line model will be an appropriate fit to the data?
c. A MINITAB simple linear regression printout is also shown at the bottom of the printout below. Find the equation of the least squared line. Interpret the estimated slope and y-intercept in the words of the problem.
d. Locate the test statistic and p-value for testing H0: b1 = 0 against Ha: b1 > 0. Is there sufficient evidence (at α = .01) of a positive linear relationship between apprised property value (x) and sale price (y)?
e. Locate and interpret practically the values of r and r2 on the printout.
f. Locate and interpret practically the 95% prediction interval for sale price (y) on the printout.

Transcribed Image Text:

Property Sale Price Appraised Value $489,900 1,825,000 890,000 250,00 1,275,000 $418,601 1,577,919 687,836 191,620 1,063,901 74 75 76 325,000 516,000 309,300 370,000 580,000 292,702 407,449 272,275 347,320 511,359 78 Scatterplot of SALEPRICE vs APPVALUE $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $0 $300,000 $600,000 $900,000 $1,200,000 $1,500,000 APPVALUE