Question: You have been asked to develop a model that will predict home prices as a function of important economic variables. After considerable research, you locate

You have been asked to develop a model that will predict home prices as a function of important economic variables. After considerable research, you locate the work of Prof. Robert Shiller, Princeton University. Shiller has compiled data for housing costs beginning in 1890. The data file Shiller House Price Cost is obtained from his data. The indexes for home price and building cost are developed to adjust for price changes over time. You are to develop a model using the Shiller data. Prepare a short interpretation of your model results. Variables are identified in the data file.
a. Does your model exhibit any tendency to predict high or low over the long time period? What is your evidence?
b. There was a housing price bubble in the first part of the 21st century. How could you identify this bubble using your model?

Step by Step Solution

★★★★★

3.37 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The model exhibits a tendency to predict low home prices over the long ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

488-M-S-L-R (2344).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!

You have been asked to develop a model that will predict the percentage of students who graduate in 4 years from highly ranked private colleges. The data file Private Colleges contains data collected...

You have been asked to develop a model that will predict the cost with financial aid for students at highly ranked private colleges. The data file Private Colleges contains data collected by a...

You have been asked to develop a model using multiple regression that predicts the retail sale of beef using time-series data. The data file Beef Veal Consumption contains a number of variables...

Use the data in the data file named Student GPA, which is described in the Chapter 11 appendix, to develop a model to predict a students grade point average in economics. Begin with the variables ACT...

12.109 You have been asked to develop a model that will predict home prices as a function of important economic variables. After considerable research, you locate the work of Prof. Robert Shiller,...

SUMMARY this article for about 2 pages with single spacing. Thank you. ECONOMETRICS: MEASUREMENT I N ECONOMICS1 I As the first incumbent of a new Chair in this University, I thought that in this...

3 COLLEGE ALGEBRA - TRIGONOMETRY Business and Finance (MAT115) This course will start with a review of basic algebra (factoring, solving linear equations, and equalities, etc.) and proceed to a study...

In his 2009 paper titled ?Market and Political/Regulatory Perspective on Recent Accounting Scandals?, Ray Ball discusses accounting scandals in 2001 and 2002. Provide a summary of the market...

Question #1: The author gives several reasons why the blame cast on the EMH for the global financial crisis is unfounded. Which one makes the most sense to you? Why? Which argument do you disagree...

6.In his 2009 paper titled ?Market and Political/Regulatory Perspective on Recent Accounting Scandals?, Ray Ball discusses accounting scandals in 2001 and 2002. Provide a summary of the market...

Pure oxygen is heated from 77 F, 14.7 lbf/in.2 to 5300 F in a constant volume container, find the final pressure, composition, and the heat transfer As oxygen is heated it dissociates O2...

The following is a list of items that may or may not be included in the cash and cash equivalents total on the balance sheet: 1. Cash in checking account 2. Petty cash on hand 3. Shares of Coca-Cola...

A financial transaction in which two parties exchange an equivalent amount of one currency for another currency and agree to reverse the exchange at a later date is an example of a . . .

An adequate security architecture would include elements of: a) Workstation security. b) Encryption. c) Segregation of duties. d) All of the above.

The primary determinant of the amount of vacation time U.S. employees receive is their length of service. According to data released by Hewitt Associates, more than 8 of 10 employers provide 2 weeks...

Recently, a case of salmonella (bacterial) poisoning was traced to a particular brand of ice cream bar, and the manufacturer removed the bars from the market. Despite this response, many consumers...

Lori has a small nail and make-up business, but she is very creative and has a large inventory of cool new products in which she tries to interest her clients. Unfortunately, it is a very competitive...

LFA J Started: May 10 at 12:07pm ments Quiz Instructions D Question 1 Examine the following example SPSS results table: purse 15 Independent Samples Test Success Levene's Test for Equality of...

Question 6 of 14 4.5/9 PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair Oil change-related services represent...