As a class project, students in a large Statistics class collected publicly available information on recent home sales in their hometowns. There are 894 properties.

These are not a random sample, but they may be representative of home sales during a short period of time, nationwide. In Chapter 28 we looked at these data and constructed a multiple regression model. Let’s look further. Among the variables available is an indication of whether the home was in an urban, suburban, or rural setting.

Question: How can we incorporate information such as this in a multiple regression model?