# Question: The following model was fitted to explain the selling prices

The following model was fitted to explain the selling prices of condominiums in a sample of 815 sales:

where

y` = selling price of condo, in dollars

x1 = square footage of living area

x2 = size of garage, in number of cars

x3 = age of condo, in years

x4 = dummy variable taking the value 1 if the condo has a fireplace and 0 otherwise

x5 = dummy variable taking the value 1 if the condo has hardwood floors and 0 if it has vinyl floors

a. Interpret the estimated coefficient of x4.

b. Interpret the estimated coefficient of x5.

c. Find a 95% confidence interval for the impact of a fireplace on selling price, all other things being equal.

d. Test the null hypothesis that type of flooring has no impact on selling price against the alternative that, all other things equal, condos with hardwood floors have a higher selling price than those with vinyl flooring.

where

y` = selling price of condo, in dollars

x1 = square footage of living area

x2 = size of garage, in number of cars

x3 = age of condo, in years

x4 = dummy variable taking the value 1 if the condo has a fireplace and 0 otherwise

x5 = dummy variable taking the value 1 if the condo has hardwood floors and 0 if it has vinyl floors

a. Interpret the estimated coefficient of x4.

b. Interpret the estimated coefficient of x5.

c. Find a 95% confidence interval for the impact of a fireplace on selling price, all other things being equal.

d. Test the null hypothesis that type of flooring has no impact on selling price against the alternative that, all other things equal, condos with hardwood floors have a higher selling price than those with vinyl flooring.

**View Solution:**## Answer to relevant Questions

The following model was fitted to data on 32 insurance companies: where y` = price-earnings ratio x1 = size of insurance company assets, in billions of dollars x2 = dummy variable taking the value 1 for regional companies ...A regression model was estimated to compare performance of students taking a business statistics courseâ€”either as a standard 14-week course or as an intensive 3-week course. The following model was estimated from ...A random sample of 93 freshmen at the University of Illinois was asked to rate, on a scale of 1 (low) to 10 (high), their overall opinion of residence hall life. They were also asked to rate their levels of satisfaction with ...State whether each of the following statements is true or false. a. The error sum of squares must be smaller than the regression sum of squares. b. Instead of carrying out a multiple regression, we can get the same ...Flyer Computer, Inc., wishes to know the effect of various variables on labor efficiency. Based on a sample of 64 observations, the following model was estimated by least squares: where y` = index of direct labor efficiency ...Post your question