A random sample of data was collected on residential sales in a large city. The following table

Question:

A random sample of data was collected on residential sales in a large city. The following table shows the sales price Y (in $ 1,000s), area X1 (in hundreds of square feet), number of bedrooms X2, total number of rooms X3, age X4 (in years), and location (dummy variables Z1 and Z2, defined as follows: Z1 = Z2 = 0 for intown; Zl = 1, Z2 = 0 for inner suburbs; Z1 = 0, Z2 = 1 for outer suburbs) of each house.

a. Identify a single regression model that uses the data for all three locations and that defines straight-line models relating sales price (Y) to area (X1) for each location.
b. Using the computer output given next, determine and plot the fitted straight lines for each location.
c. Test the null hypothesis that the straight lines for the three locations coincide.
d. Test H0: "The lines are parallel" versus HA: "The lines are not parallel."
e. In light of your answers to parts (c) and (d), comment on differences and similarities in the sales price-area relationship for the three locations.