11.67.* Refer to the previous exercise. When we add an interaction term, we get y = 16.6 + 66.6x1 31.8x2 + 29.4(x1x2). (a) Interpret

11.67.* Refer to the previous exercise. When we add an interaction term, we get ˆy = −16.6 + 66.6x1 − 31.8x2 +
29.4(x1x2).

(a) Interpret the fit by reporting the prediction equation between selling price and size of house separately for new homes (x2 = 1) and for old homes (x2 = 0). Interpret.
(This fit is equivalent to fitting lines separately to the data for new homes and for old homes.)

(b) Aplot of the data shows an outlier, a new home with a very high selling price.When that observation is removed from the data set and the model is refitted, ˆy = −16.6 +
66.6x1 + 9.0x2 + 5.0(x1x2). Redo (a), and explain how an outlier can have a large impact on a regression analysis.

TABLE 11.25 B Std. Error t Sig (Constant) -26.089 5.977 -4.365 0.0001 SIZE 72.575 3.508 20.690 0.0001 NEW 19.587 3.995 4.903 0.0001