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5. Re-estimate the following simple regression model, this time dividing your sample by houses with 2, 3 and 4 bedrooms (i.e. 3 models in total):

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For each subsample, how does price change if two houses are identical except one is 250 square feet larger? Show your workings. What do you conclude from comparing the simple regression results on the full sample to the simple regression results on subsamples based on the number of bedrooms?

(Above is the question below is the answer)

This file contains data on 1000 houses sold in the suburbs of a large U.S. city in 2021.

Use the data to answer questions 1 to 7 below. You may use Gretl to estimate all models. All numerical answers should be stated to 2 decimal places.

The full list of variables and variable descriptions are as follows:

PRICE = sale price, dollars BEDROOMS = number of bedrooms BATHS = number of full baths SQFT = total square feet FLOOR = number of floors WATERFRONT = 1 if on the waterfront CONDITION = rating of condition on a scale of 1 to 5 YR_BUILT = year of construction

This file contains data on 1000 houses sold in the suburbs of a large U.S. city in 2021.

Use the data to answer questions 1 to 7 below. You may use Gretl to estimate all models. All numerical answers should be stated to 2 decimal places.

The full list of variables and variable descriptions are as follows:

PRICE = sale price, dollars BEDROOMS = number of bedrooms BATHS = number of full baths SQFT = total square feet FLOOR = number of floors WATERFRONT = 1 if on the waterfront CONDITION = rating of condition on a scale of 1 to 5 YR_BUILT = year of construction