In Chapter 15, we are learning about multiple regression. Consider the following scenario:

A real estate agent is interested in building a regression model to predict the selling price of a home. She hopes this model will assist with determining appropriate list prices. The agent collected the following variables from 100 homes recently sold in her town:

Age (in years), Square feet, List Price (in $1000 units) and Sale Price (in $1000 units)

The agent has hired you to select the best regression model to predict the sale price (SP) using one or more of the predictor variables, Age (AGE), Square feet (SQFT), List Price (LP).

The table below lists seven (7) possible regression models that you have calculated.

Initial Posting: Use the information in table below to answer the following questions.

1. If the agent wants a regression model with one predictor variable, which model is best? Why did you pick this model?

2. Considering all of the models shown in the table above, which regression equation is best for predicting sale price? Explain your answer.

3. Using the model you selected in question 2, predict the sale prices for ONE of the following houses listed by this agent last month:

Smith House: 16 years old, 2000 square feet, list price is $640,000

Gomez House: 3 years old, 2450 square feet, list price is $855,000

Singh House: 8 years old, 1475 square feet, list price is $575,000

NOTE: If your model includes the list price, you must change the list price to $1000s to use in the regression equation: Smith is 640, Gomez 855, Singh 575

Predicter () variables MEE Retraction Equation = 1305-21 931 1(850) Square feet 0.771 0.709 "-31.665 40.2601[square feet) LINE Price 1,811 61 04$70 04970 "= 12029087736si price) Age, Square feet 10,434.21 0.829 0.325 p= 386.55-9.253(age)+ 0.19Msquare feet) Age, Ust price 1,811 75 0.970 0.570 "= 12.493-0.775(age) +0.859(list price) Square feet, List price 1,764 10 0.971 0.970 = 2.869+010207(square Reet)+0874(list price) Ago, Square feet, Line 1,761 71 0.971 0670 "'= 34.104-0.797(age)+0.0203(square feet#0.805(list price)