Table gives the selling price (Price, expressed in thousands of dollars), the square footage (SqrFt), the number of bathrooms (Bathrms), and the niceness rating (Niceness, expressed as an integer from 1 to 7) of 80 homes randomly selected from all homes sold in a Florida city during the last six months. (The random selections were made from homes having between 2,000 and 3,500 square feet.) Table 3.11 also gives values of the dummy variable Pool?, which equals 1 if a home has a pool and 0 otherwise.
a. Noting that β4 is the effect on mean sales price of a home having a pool, find (on the output) a point estimate of this effect. If the average current purchase price of the pools in the sample is $ 32,500, find a point estimate of the percentage of a pool’s cost that a customer buying a pool can expect to recoup when selling his ( or her) home.
b. If we add various combinations of the interaction terms SqrFt X Pool?, Bathrooms Pool?, and Niceness X Pool? to the above model, we find that the p-values related to these terms are greater than .05. What does this imply?