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. Among the variables available is an indication of whether the home was in an urban, suburban, or rural setting. Here is a scatterplot relating the selling Price of homes to their Living area (sq ft), colored according to whether or not they were in a suburban setting.

a) What is an appropriate interpretation of the coefficient of Living area?
b) What is an appropriate interpretation of the coefficient of Suburb?
c) Is it appropriate to use a variable such as Suburb in this model?

Price 1500000 1200000 900000 600000 300000 + 1000 2000 + 3000 Living Area Variable Intercept Living area Suburb Response variable is: Price R squared 16.3% s = 264220 + 4000 Coefficient 136512 110.318 104610 Other Suburban 5000