Question: Case Description Andrew Shaw is a new data scientist at Pacific Development Corporation, or PacDev for short, a real estate development firm in Orange County,

Case Description Andrew Shaw is a new data scientist at Pacific Development Corporation, or PacDev for short, a real estate development firm in Orange County, CA. PacDev buys and sells single family residences (SFR) in the LA area, specifically in Long Beach, Santa Monica, Westwood and Beverly Hills. The company's business model is to update the homes before reselling, usually adding square footage during the remodel, either by increasing the home's existing footprint orless frequentlyby adding a second story. The home market in LA is dynamic. New data on SFR sales comes out monthly and the company needs market analytics immediately to take advantage of new trends and remain competitive. Much of Andrew's work has consisted in updating the company's comprehensive MarketTrends report (written by his predecessor) and then interpreting it for PacDev executives in a presentation at the monthly analytics meeting. In addition to talking about market metrics in the report, which the executives have come to expect, Andrew tries to provide some fresh analysis as well. The existing report documents which LA cities show the largest SFR monthly price increase. But recently it has occurred to Andrew that he also needs to examine which cities show the largest price increases associated with additional square footage. This is especially important, he has realized, given PacDev's business model of enlarging SFR during the remodel. He is hoping to impress company executives with his analysis. Which city should Andrew recommend PacDev focus on to maximize price increase for additional square footage? Need a summary of the evidence that he should use to support this recommendation.

1- Construct four scatter plots of `price` vs. `sqft` -- one for each city in the dataset. Comment on what you observe. 2-Regress `price` (the outcome variable) on `sqft` (the independent variable).

- Report and interpret (magnitude and significance) the coefficient for `sqft`. In particular, comment on if the coefficient estimate of `sqft` is statistically significant. - Provide a 95% confidence interval for the effect of `sqft` on `price`. 3-Based on the scatter plots in Q1, we see that it is important to control for city. Fit a model that controls for city.

- What is the reference baseline level for the factor variable `city`? - Interpret the coefficients of `sqft` and `city` variables. Also, provide a 95% confidence interval for the effect of `sqft` on `price`. - How does the R-squared for this model compare to the R-squared of the model estimated in Q2?

4 a-Has the relationship between `price` and `sqft` vary by city? Generate a plot of this interaction between `city` and `sqft` with summary least squares lines. What is the meaning of the plot.

b- Remove Beverly Hills from the data (as it tends to add noise) and fit a model of `price` with an interaction between `sqft` and `city`.

- What is the reference baseline level for the factor variable `city`? - What is the effect of a unit increase in `sqft` on `price` in each city (other than Beverly Hills). Make sure to comment on the statistical significance of each estimate

c- Run a separate regression for Beverly Hills to fit a model `price` as a function of `sqft`. What is the effect of sqft on price in Beverly Hills?

5- What should Andrew say in his presentation? brief summary of the evidence that he should use to support this recommendation.

city type bed bath garage sqft pool spa price
1 LongBeach 0 1.0 513 NA 119000
2 LongBeach 0 1.0 550 NA 153000
3 LongBeach 0 1.0 550 NA 205000
4 LongBeach 0 1.0 1 1030 NA 300000
5 LongBeach 0 1.0 1 1526 NA 375000
6 LongBeach 1 1.0 552 NA 159900
7 LongBeach 1 1.0 558 NA 135000
8 LongBeach 1 1.0 596 NA 105000
9 LongBeach 1 1.0 744 NA 167000
10 LongBeach 1 1.0 750 NA 134900
11 LongBeach 1 1.0 750 NA 145000
12 LongBeach 1 1.0 791 NA 219900
13 LongBeach 1 1.0 798 NA 195000
14 LongBeach 1 1.0 1 671 NA 120000
15 LongBeach 1 1.0 1 796 NA 179900
16 LongBeach 1 1.0 1 935 NA 239000
17 LongBeach 1 1.0 1 1006 NA 360000
18 LongBeach 1 1.0 1 1431 NA 500000
19 LongBeach 1 1.0 2 926 NA 339000
20 LongBeach 1 1.0 2 1209 NA 580000
21 LongBeach 1 1.0 2 1620 NA 419900
22 LongBeach 1 1.0 2 1924 NA 394900
23 LongBeach 1 1.0 2 1970 NA 619000
24 LongBeach 1 2.0 1 1310 NA 359900
25 LongBeach 1 2.0 1 1450 NA 325000
26 LongBeach 1 2.0 1 1450 NA 329900
27 LongBeach 1 2.0 2 1077 NA 325000
28 LongBeach 2 1.0 1133 NA 325000
29 LongBeach 2 1.0 2374 NA 799000
30 LongBeach 2 1.0 2 1620 NA 418000
31 LongBeach 2 1.0 2 2019 NA 420000
32 LongBeach 2 2.0 1 868 NA 240000
33 LongBeach 2 2.0 1 1050 NA 318800
34 LongBeach 2 2.0 1 1241 NA 299500
35 LongBeach 4 4.0 3636 NA 349900
36 LongBeach 6 3.0 2554 NA 379900
37 LongBeach Condo/Twh 0 1.0 462 NA 138900
38 LongBeach Condo/Twh 0 1.0 475 NA 120000
39 LongBeach Condo/Twh 0 1.0 527 NA 179000
40 LongBeach Condo/Twh 0 1.0 702 NA 236900
41 LongBeach Condo/Twh 0 1.0 2 650 NA 217900
42 LongBeach Condo/Twh 1 1.0 403 NA 139950
43 LongBeach Condo/Twh 1 1.0 426 NA 135000
44 LongBeach Condo/Twh 1 1.0 560 NA 135000
45 LongBeach Condo/Twh 1 1.0 561 NA 273500
46 LongBeach Condo/Twh 1 1.0 590 NA 215000
47 LongBeach Condo/Twh 1 1.0 590 NA 259900
48 LongBeach Condo/Twh 1 1.0 597 NA 130000
49 LongBeach Condo/Twh 1 1.0 599 NA 350000
50 LongBeach Condo/Twh 1 1.0 600 NA 183900
51 LongBeach Condo/Twh 1 1.0 617 NA 104990
52 LongBeach Condo/Twh 1 1.0 628 NA 119000
53 LongBeach Condo/Twh 1 1.0 628 NA 285000
54 LongBeach Condo/Twh 1 1.0 631 NA 215000
55 LongBeach Condo/Twh 1 1.0 633 NA 175000
56 LongBeach Condo/Twh 1 1.0 635 NA 243000
57 LongBeach Condo/Twh 1 1.0 664 NA 109000
58 LongBeach Condo/Twh 1 1.0 667 NA 199900
59 LongBeach Condo/Twh 1 1.0 667 NA 350000
60 LongBeach Condo/Twh 1 1.0 670 NA 155900
61 LongBeach Condo/Twh 1 1.0 680 NA 239000
62 LongBeach Condo/Twh 1 1.0 693 NA 220000
63 LongBeach Condo/Twh 1 1.0 693 NA 229900
64 LongBeach Condo/Twh 1 1.0 693 NA 245000
65 LongBeach Condo/Twh 1 1.0 700 NA 125000
66 LongBeach Condo/Twh 1 1.0 707 NA 185000
67 LongBeach Condo/Twh 1 1.0 710 NA 195000
68 LongBeach Condo/Twh 1 1.0 739 NA 179000
69 LongBeach Condo/Twh 1 1.0 741 NA 165000
70 LongBeach Condo/Twh 1 1.0 745 NA 199900
71 LongBeach Condo/Twh 1 1.0 745 NA 200000
72 LongBeach Condo/Twh 1 1.0 751 NA 221000
73 LongBeach Condo/Twh 1 1.0 752 NA 225900
74 LongBeach Condo/Twh 1 1.0 772 NA 169000
75 LongBeach Condo/Twh 1 1.0 779 NA 124900
76 LongBeach Condo/Twh 1 1.0 787 NA 167000
77 LongBeach Condo/Twh 1 1.0 792 NA 109000
78 LongBeach Condo/Twh 1 1.0 811 NA 145000
79 LongBeach Condo/Twh 1 1.0 839 NA 335000
80 LongBeach Condo/Twh 1 1.0 864 NA 249000
81 LongBeach Condo/Twh 1 1.0 981 NA 216000
82 LongBeach Condo/Twh 1 1.0 1069 NA 330000
83 LongBeach Condo/Twh 1 1.0 1 530 NA 175000
84 LongBeach Condo/Twh 1 1.0 1 540 NA 165000
85 LongBeach Condo/Twh 1 1.0 1 590 NA 236900
86 LongBeach Condo/Twh 1 1.0 1 592 NA 175000
87 LongBeach Condo/Twh 1 1.0 1 597 NA 130000
88 LongBeach Condo/Twh 1 1.0 1 597 NA 140000
89 LongBeach Condo/Twh 1 1.0 1 597 NA 149900
90 LongBeach Condo/Twh 1 1.0 1 597 NA 150000
91 LongBeach Condo/Twh 1 1.0 1 600 NA 244900
92 LongBeach Condo/Twh 1 1.0 1 600 NA 279900
93 LongBeach Condo/Twh 1 1.0 1 600 NA 285000
94 LongBeach Condo/Twh 1 1.0 1 600 NA 325000
95 LongBeach Condo/Twh 1 1.0 1 607 NA 150000
96 LongBeach Condo/Twh 1 1.0 1 613 NA 119000
97 LongBeach Condo/Twh 1 1.0 1 632 NA 129000
98 LongBeach Condo/Twh 1 1.0 1 660 NA 110000
99 LongBeach Condo/Twh 1 1.0 1 660 NA 112900
100 LongBeach Condo/Twh 1 1.0 1 661 NA 150000
101 LongBeach Condo/Twh 1 1.0 1 672 NA 379995
102 LongBeach Condo/Twh 1 1.0 1 680 NA 204900
103 LongBeach Condo/Twh 1 1.0 1 680 NA 235000
104 LongBeach Condo/Twh 1 1.0 1 680 NA 239000
105 LongBeach Condo/Twh 1 1.0 1 680 NA 249000
106 LongBeach Condo/Twh 1 1.0 1 680 NA 249900
107 LongBeach Condo/Twh 1 1.0 1 680 NA 250000
108 LongBeach Condo/Twh 1 1.0 1 681 NA 320000
109 LongBeach Condo/Twh 1 1.0 1 683 NA 119000
110 LongBeach Condo/Twh 1 1.0 1 686 NA 119500
111 LongBeach Condo/Twh 1 1.0 1 686 NA 189000
112 LongBeach Condo/Twh 1 1.0 1 687 NA 125000
113 LongBeach Condo/Twh 1 1.0 1 693 NA 230000
114 LongBeach Condo/Twh 1 1.0 1 693 NA 245000
115 LongBeach Condo/Twh 1 1.0 1 698 NA 175000
116 LongBeach Condo/Twh 1 1.0 1 703 NA 374000
117 LongBeach Condo/Twh 1 1.0 1 707 NA 130000
118 LongBeach Condo/Twh 1 1.0 1 719 NA 359000
119 LongBeach Condo/Twh 1 1.0 1 732 NA 248900
120 LongBeach Condo/Twh 1 1.0 1 739 NA 249500
121 LongBeach Condo/Twh 1 1.0 1 741 NA 319990
122 LongBeach Condo/Twh 1 1.0 1 754 NA 100000
123 LongBeach Condo/Twh 1 1.0 1 789 NA 309000
124 LongBeach Condo/Twh 1 1.0 1 792 NA 428900
125 LongBeach Condo/Twh 1 1.0 1 816 NA 224900
126 LongBeach Condo/Twh 1 1.0 1 825 NA 230000
127 LongBeach Condo/Twh 1 1.0 1 832 NA 125000
128 LongBeach Condo/Twh 1 1.0 1 833 NA 189000
129 LongBeach Condo/Twh 1 1.0 1 846 NA 325000
130 LongBeach Condo/Twh 1 1.0 1 873 NA 224000
131 LongBeach Condo/Twh 1 1.0 1 875 NA 229000
132 LongBeach Condo/Twh 1 1.0 1 890 NA 150000
133 LongBeach Condo/Twh 1 1.0 1 938 NA 249900
134 LongBeach Condo/Twh 1 1.0 1 1000 NA 345000
135 LongBeach Condo/Twh 1 1.0 1 1020 NA 279900
136 LongBeach Condo/Twh 1 1.0 1 1400 NA 299000
137 LongBeach Condo/Twh 1 1.0 2 624 NA 109000
138 LongBeach Condo/Twh 1 1.0 2 693 Y NA 240000
139 LongBeach Condo/Twh 1 1.0 2 736 NA 458000
140 LongBeach Condo/Twh 1 1.0 2 750 NA 480000
141 LongBeach Condo/Twh 1 1.0 2 793 NA 119900
142 LongBeach Condo/Twh 1 1.0 2 926 NA 269000
143 LongBeach Condo/Twh 1 1.0 2 926 NA 270000
144 LongBeach Condo/Twh 1 1.0 2 926 NA 324000
145 LongBeach Condo/Twh 1 1.5 1620 NA 399900
146 LongBeach Condo/Twh 1 2.0 880 NA 279000
147 LongBeach Condo/Twh 1 2.0 950 NA 240000
148 LongBeach Condo/Twh 1 2.0 952 NA 250000
149 LongBeach Condo/Twh 1 2.0 1017 NA 279000
150 LongBeach Condo/Twh 1 2.0 1047 NA 309900
151 LongBeach Condo/Twh 1 2.0 1 584 NA 110000
152 LongBeach Condo/Twh 1 2.0 1 731 NA 222000
153 LongBeach Condo/Twh 1 2.0 1 791 NA 275000
154 LongBeach Condo/Twh 1 2.0 1 853 NA 139000
155 LongBeach Condo/Twh 1 2.0 1 880 NA 299900
156 LongBeach Condo/Twh 1 2.0 2 880 NA 309000
157 LongBeach Condo/Twh 1 2.0 2 1044 NA 184900
158 LongBeach Condo/Twh 1 3.0 1570 NA 325000
159 LongBeach Condo/Twh 2 1.0 760 NA 199900
160 LongBeach Condo/Twh 2 1.0 769 NA 199000
161 LongBeach Condo/Twh 2 1.0 779 NA 250000
162 LongBeach Condo/Twh 2 1.0 849 NA 185000
163 LongBeach Condo/Twh 2 1.0 860 NA 159000
164 LongBeach Condo/Twh 2 1.0 1 779 NA 109000
165 LongBeach Condo/Twh 2 1.0 1 800 NA 119000
166 LongBeach Condo/Twh 2 1.0 1 806 NA 179000
167 LongBeach Condo/Twh 2 1.0 1 830 NA 174900
168 LongBeach Condo/Twh 2 1.0 1 840 NA 350000
169 LongBeach Condo/Twh 2 1.0 1 879 NA 205000
170 LongBeach Condo/Twh 2 1.0 1 892 NA 150000
171 LongBeach Condo/Twh 2 1.0 1 906 NA 195000
172 LongBeach Condo/Twh 2 1.0 1 910 NA 297000
173 LongBeach Condo/Twh 2 1.0 1 941 NA 285000
174 LongBeach Condo/Twh 2 1.0 2 859 NA 199000
175 LongBeach Condo/Twh 2 1.0 2 860 NA 225000
176 LongBeach Condo/Twh 2 1.0 2 957 NA 348000
177 LongBeach Condo/Twh 2 1.0 2 1291 NA 399000
178 LongBeach Condo/Twh 2 2.0 680 NA 106000
179 LongBeach Condo/Twh 2 2.0 680 NA 129900
180 LongBeach Condo/Twh 2 2.0 690 NA 120000
181 LongBeach Condo/Twh 2 2.0 720 NA 137900
182 LongBeach Condo/Twh 2 2.0 777 NA 134900
183 LongBeach Condo/Twh 2 2.0 780 NA 149900
184 LongBeach Condo/Twh 2 2.0 786 NA 174900
185 LongBeach Condo/Twh 2 2.0 830 NA 144900
186 LongBeach Condo/Twh 2 2.0 838 NA 225000
187 LongBeach Condo/Twh 2 2.0 840 NA 161000
188 LongBeach Condo/Twh 2 2.0 840 NA 169000
189 LongBeach Condo/Twh 2 2.0 850 NA 139900
190 LongBeach Condo/Twh 2 2.0 865 NA 350000
191 LongBeach Condo/Twh 2 2.0 877 NA 125000
192 LongBeach Condo/Twh 2 2.0 892 NA 179000
193 LongBeach Condo/Twh 2 2.0 903 NA 169900
194 LongBeach Condo/Twh 2 2.0 920 NA 129000
195 LongBeach Condo/Twh 2 2.0 920 NA 135000
196 LongBeach Condo/Twh 2 2.0 940 NA 159000
197 LongBeach Condo/Twh 2 2.0 960 NA 129000
198 LongBeach Condo/Twh 2 2.0 990 NA 169000
199 LongBeach Condo/Twh 2 2.0 1020 NA 160000
200 LongBeach Condo/Twh 2 2.0 1047 NA 334900
201 LongBeach Condo/Twh 2 2.0 1080 NA 329000
202 LongBeach Condo/Twh 2 2.0 1080 NA 729000
203 LongBeach Condo/Twh 2 2.0 1146 NA 175000
204 LongBeach Condo/Twh 2 2.0 1171 NA 249900
205 LongBeach Condo/Twh 2 2.0 1184 NA 279900
206 LongBeach Condo/Twh 2 2.0 1198 NA 223100
207 LongBeach Condo/Twh 2 2.0 1251 NA 231900
208 LongBeach Condo/Twh 2 2.0 1253 NA 315000
209 LongBeach Condo/Twh 2 2.0 1264 NA 1150000
210 LongBeach Condo/Twh 2 2.0 1340 NA 500000
211 LongBeach Condo/Twh 2 2.0 1590 NA 699000
212 LongBeach Condo/Twh 2 2.0 1 750 NA 219900
213 LongBeach Condo/Twh 2 2.0 1 751 NA 145000
214 LongBeach Condo/Twh 2 2.0 1 751 NA 147900
215 LongBeach Condo/Twh 2 2.0 1 782 NA 130000
216 LongBeach Condo/Twh 2 2.0 1 794 NA 275000

Showing 1 to 24 of 1,594 entries, 9 total columns

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Mathematics Questions!