Refer to Exercise 13.12. The realtors informed the analyst that the relation between selling price and age of home could vary greatly depending on the type of roof. What terms would need to be included in the regression model in order to be able to evaluate whether the relation between selling price and age of home varies depending on the type of roof?
A business analyst at a major real estate firm wants to build a regression model that will predict the price of a single- family home based on a number of explanatory variables. The real estate firm’s data base has an enormous amount of information on selling prices of homes and potential variables that are related to that price. After a number of discussions with experienced realtors, you decide to model price of a home as a function of the following variables: size of home in terms of floor space, lot size, number of bathrooms, number of bedrooms, age of home, garage size, number of months home has been on the market, distance to nearest elementary school, type of neighborhood, traffic volume on street, and racial mixture of neighborhood.