Refer to the Real Estate data, which report information on homes sold in Goodyear, Arizona. Use the selling price of the home as the dependent variable and determine the regression equation with number of bedrooms, size of the house, center of the city, and number of bathrooms as independent variables.
a. Use a statistical software package to determine the multiple regression equation. Discuss each of the variables. For example, are you surprised that the regression coefficient for distance from the center of the city is negative? How much does a garage or a swimming pool add to the selling price of a home?
b. Determine the value of the Intercept.
c. Develop a correlation matrix. Which independent variables have strong or weak correlations with the dependent variable? Do you see any problems with multicollinearity?
d. Conduct the global test on the set of independent variables. Interpret.
e. Conduct a test of hypothesis on each of the independent variables. Would you consider deleting any of the variables? If so, which ones?
f. Rerun the analysis until only significant regression coefficients remain in the analysis. Identify these variables.
g. Develop a histogram or a stem-and-leaf display of the residuals from the final regression equation developed in part (f). Is it reasonable to conclude that the normality assumption has been met?
h. Plot the residuals against the fitted values from the final regression equation developed in part (f). Plot the residuals on the vertical axis and the fitted values on the horizontal axis.

  • CreatedDecember 10, 2014
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