An appraiser collected the data found in file Dat9-18.xls describing the auction selling price, diameter (in inches), and item type of several pieces of early 20th century metal tableware manufactured by a famous artisan. The item type variable is coded as follows: B = bowl, C = casserole pan, D = dish, T = tray and P = plate. The appraiser wants to build a multiple regression model for this data to predict average selling prices of similar items.

a. Construct a multiple regression model for this problem. (Create binary independent variables to represent the item type data). What is the estimated regression function?

b. Interpret the value of the R2 statistic for this model.

c. Construct an approximate 95% prediction interval for the expected selling price of an 18-inch diameter casserole pan. Interpret this interval.

d. What other variables not included in the model might help explain the remaining variation in auction selling prices for these items?