The file S02_11.xlsx contains data on 148 houses that were recently sold in a (fictional) suburban community. The data set includes the selling price of each house, along with its appraised value, square footage, number of bedrooms, and number of bathrooms.
a. Create a table of correlations between all of the variables. Comment on the magnitudes of the correlations. Specifically, which of the last three variables, Square Feet, Bedrooms, and Bathrooms, are highly correlated with Selling Price?
b. Create four scatter plots to show how the other four variables are related to Selling Price. In each, Selling Price should be on the Y axis. Are these in line with the correlations in part a?
c. You might think of the difference, Selling Price minus Appraised Value, as the “error” in the appraised value, in the sense that this difference is how much more or less the house sold for than the appraiser expected. Find the correlation between this difference and Selling Price, and find the correlation between the absolute value of this difference and Selling Price. If either of these correlations is reasonably large, what is it telling us?