Assignment Content

Purpose

This assignment provides an opportunity to develop, evaluate, and apply bivariate and multivariate linear regression models.

Resources:Microsoft Excel, DAT565_v3_Wk5_Data_File

Offices	Entrances	Age	AssessedValue ($'000)
4	2	8	1796
3	2	12	1544
4	2	2	2094
4	2	34	1968
3	2	38	1567
4	2	31	1878
2	1	19	949
2	1	48	910
4	2	42	1774
2	1	4	1187
3	2	15	1113
2	1	31	671
3	2	42	1678
1	2	35	710
2	1	17	678
2	2	5	1585
2	1	13	842
2	2	45	1539
1	1	45	433
3	1	27	1268
2	2	41	1251
2	2	33	1094
1	2	50	638
2	2	39	999
1	1	20	653
4	3	17	1914
2	2	24	772
3	1	5	890
2	2	15	1282
3	2	27	1264
2	1	8	1162
3	2	17	1447

Instructions:

The Excel file for this assignment contains a database with information about the tax assessment value assigned to medical office buildings in a city. The following is a list of the variables in the database:

• FloorArea: square feet of floor space
• Offices: number of offices in the building
• Entrances: number of customer entrances
• Age: age of the building (years)
• AssessedValue: tax assessment value (thousands of dollars)

Use the data to construct a model that predicts the tax assessment value assigned to medical office buildings with specific characteristics.

• Construct a scatter plot in Excel with FloorArea as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
• Use Excel's Analysis ToolPak to conduct a regression analysis of FloorArea and AssessmentValue. Is FloorArea a significant predictor of AssessmentValue?
• Construct a scatter plot in Excel with Age as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
• Use Excel's Analysis ToolPak to conduct a regression analysis of Age and Assessment Value. Is Age a significant predictor of AssessmentValue?

Construct a multiple regression model.

• Use Excel's Analysis ToolPak to conduct a regression analysis with AssessmentValue as the dependent variable and FloorArea, Offices, Entrances, and Age as independent variables. What is the overall fit r^2? What is the adjusted r^2?
• Which predictors are considered significant if we work with =0.05? Which predictors can be eliminated?
• What is the final model if we only use FloorArea and Offices as predictors?
• Suppose our final model is:
• AssessedValue = 115.9 + 0.26 x FloorArea + 78.34 x Offices
• What wouldbe the assessed value of a medical office building with a floor area of 3500 sq. ft., 2 offices, that was built 15 years ago? Is this assessed value consistent with what appears in the database?