This data table contains the listed prices (in thousands of dollars) and the number of square feet for 28 homes in or near Seattle. The data come from the Web site of a realtor offering homes in the area. Use the selling price per square foot as Y and the reciprocal of the number of square feet as X.
(a) The data used previously for this analysis exclude a home with 2,500 square feet that costs $1.5 million ($1,500 thousand) and is on a lot with 871,000 square feet. Add this case to the data table and refit the indicated model.
(b) Compare the ft of the model with this large home to the ft without this home. Does the slope or intercept differ by very much between the two cases? Use one estimated model as your point of reference.
(c) Which is more affected by the outlier: the estimated fixed costs or the estimated marginal cost?
(d) Outliers often shout “There’s a reason for me being different!” Consider the non missing values in the column labeled Lot Size. These give the number of square feet for the size of the lot that comes with the home. Does this column help explain the outlier and suggest a lurking variable?