GENERAL NOTE: Questions 6 through 8 are all based on this second regression.
Moving to Chapter 14 material (but still using the same Excel file), run one regression with “Selling Price” as the Y input and the following five variables as X variables:
- Number of Baths
- Number of Bedrooms
- Pool (dummy) – 1 indicates “pool”; 0 indicates “no pool”
- Garage (dummy) – 1 indicates “garage”; 0 indicates “no garage”
- Distance to Town Center
Which of the following interpretations of the coefficient on the “Number of Bedrooms” variable is correct?
On average, the selling price of a house will increase by approximately $153,678 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $2,408 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant).
On average, the selling price of a house will decrease by approximately $9,467 for an additional bedroom (holding the other four variables constant).
| | On average, the selling price of a house will increase by approximately $153,678 for an additional bedroom (holding the other four variables constant). |
| | On average, the selling price of a house will increase by approximately $2,408 for an additional bedroom (holding the other four variables constant). |
| | On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant). |
| | On average, the selling price of a house will decrease by approximately $9,467 for an additional bedroom (holding the other four variables constant). | Selling Prices of Houses and Related Information | | | | | | | | | | | Selling Price (in $) | Size (in square feet) | Number of Baths | Number of Bedrooms | Pool (dummy) | Garage (dummy) | Distance to Town Center | | 221100 | 2300 | 1.5 | 3 | 1 | 0 | 18 | | 266600 | 2400 | 2 | 4 | 0 | 1 | 13 | | 292400 | 2100 | 2 | 4 | 0 | 1 | 14 | | 213600 | 2200 | 2.5 | 2 | 0 | 0 | 16 | | 139900 | 2100 | 1.5 | 2 | 0 | 0 | 28 | | 245400 | 2100 | 2 | 2 | 1 | 1 | 12 | | 327200 | 2500 | 2 | 6 | 0 | 1 | 15 | | 271800 | 2100 | 2.5 | 2 | 0 | 1 | 9 | | 221100 | 2300 | 1.5 | 3 | 1 | 0 | 18 | | 266600 | 2400 | 2 | 4 | 0 | 1 | 13 | | 292400 | 2100 | 2 | 4 | 0 | 1 | 14 | | 209000 | 1700 | 1.5 | 2 | 0 | 1 | 8 | | 270800 | 2500 | 2 | 6 | 0 | 1 | 7 | | 246100 | 2100 | 2 | 4 | 0 | 1 | 18 | | 194400 | 2300 | 2 | 2 | 0 | 0 | 11 | | 281300 | 2100 | 2 | 3 | 0 | 1 | 16 | | 172700 | 2200 | 2 | 4 | 1 | 0 | 16 | | 207500 | 2300 | 2.5 | 5 | 1 | 0 | 21 | | 198900 | 2200 | 2 | 3 | 1 | 1 | 10 | | 209300 | 1900 | 2 | 6 | 1 | 1 | 15 | | 252300 | 2600 | 2 | 4 | 0 | 1 | 8 | | 192900 | 1900 | 2.5 | 4 | 1 | 1 | 14 | | 209300 | 2100 | 1.5 | 5 | 0 | 0 | 20 | | 345300 | 2600 | 2 | 8 | 0 | 1 | 9 | | 326300 | 2100 | 3 | 6 | 0 | 1 | 11 | | 173100 | 2200 | 1.5 | 2 | 1 | 1 | 21 | | 187000 | 1900 | 2 | 2 | 0 | 0 | 26 | | 257200 | 2100 | 2 | 2 | 0 | 1 | 9 | | 233000 | 2200 | 1.5 | 3 | 0 | 1 | 14 | | 177100 | 1900 | 2 | 2 | 0 | 1 | 10 | | 182700 | 2000 | 2.5 | 4 | 1 | 0 | 14 | | 216000 | 2300 | 2 | 4 | 0 | 0 | 19 | | 312100 | 2600 | 2.5 | 6 | 0 | 1 | 7 | | 199800 | 2100 | 2 | 3 | 0 | 1 | 19 | | 273200 | 2200 | 3 | 5 | 0 | 1 | 16 | | 206000 | 2100 | 1.5 | 3 | 1 | 0 | 9 | | 232200 | 1900 | 1.5 | 3 | 1 | 1 | 16 | | 198300 | 2100 | 1.5 | 4 | 1 | 1 | 19 | | 205100 | 2000 | 2 | 3 | 1 | 0 | 20 | | 175600 | 2300 | 2 | 4 | 1 | 1 | 24 | | 307800 | 2400 | 3 | 3 | 1 | 1 | 21 | | 269200 | 2200 | 3 | 5 | 0 | 1 | 8 | | 224800 | 2200 | 2.5 | 3 | 0 | 1 | 17 | | 171600 | 2000 | 2 | 3 | 1 | 0 | 16 | | 216800 | 2200 | 2 | 3 | 0 | 1 | 15 | | 192600 | 2200 | 2 | 6 | 1 | 0 | 14 | | 236400 | 2200 | 2 | 5 | 0 | 1 | 20 | | 172400 | 2200 | 2 | 3 | 0 | 0 | 23 | | 251400 | 1900 | 2 | 3 | 0 | 1 | 12 | | 246000 | 2300 | 3 | 6 | 0 | 1 | 7 | | 147400 | 1700 | 2 | 6 | 1 | 0 | 12 | | 176000 | 2200 | 2 | 4 | 0 | 1 | 15 | | 228400 | 2300 | 1.5 | 3 | 0 | 1 | 17 | | 166500 | 1600 | 2.5 | 3 | 1 | 0 | 19 | | 189400 | 2200 | 2 | 4 | 0 | 1 | 24 | | 312100 | 2400 | 3 | 7 | 0 | 1 | 13 | | 289800 | 2000 | 3 | 6 | 0 | 1 | 21 | | 269900 | 2200 | 2.5 | 5 | 1 | 1 | 11 | | 154300 | 2000 | 2 | 2 | 0 | 0 | 13 | | 222100 | 2100 | 2 | 2 | 0 | 1 | 9 | | 209700 | 2200 | 2 | 5 | 1 | 1 | 13 | | 190900 | 2200 | 2 | 3 | 1 | 1 | 18 | | 254300 | 2500 | 2 | 4 | 1 | 1 | 15 | | 207500 | 2100 | 2 | 3 | 1 | 0 | 10 | | 209700 | 2200 | 2 | 4 | 1 | 1 | 19 | | 294000 | 2100 | 2.5 | 2 | 0 | 1 | 13 | | 176300 | 2000 | 2 | 2 | 1 | 0 | 17 | | 294300 | 2400 | 2 | 7 | 0 | 1 | 8 | | 224000 | 1900 | 2 | 3 | 1 | 1 | 6 | | 125000 | 1900 | 1.5 | 2 | 0 | 0 | 18 | | 236800 | 2600 | 2 | 4 | 1 | 1 | 17 | | 164100 | 2300 | 2 | 4 | 0 | 0 | 19 | | 217800 | 2500 | 2 | 3 | 0 | 0 | 12 | | 192200 | 2400 | 2.5 | 2 | 0 | 0 | 16 | | 125900 | 2400 | 1.5 | 2 | 0 | 0 | 28 | | 220900 | 2300 | 2 | 2 | 1 | 1 | 12 | | 294500 | 2700 | 2 | 6 | 0 | 1 | 15 | | 253200 | 2300 | 2 | 3 | 0 | 1 | 16 | | 155400 | 2400 | 2 | 4 | 1 | 0 | 16 | | 186700 | 2500 | 2.5 | 5 | 1 | 0 | 21 | | 179000 | 2400 | 2 | 3 | 1 | 1 | 10 | | 188300 | 2100 | 2 | 6 | 1 | 1 | 15 | | 227100 | 2900 | 2 | 4 | 0 | 1 | 8 | | 173600 | 2100 | 2.5 | 4 | 1 | 1 | 14 | | 188300 | 2300 | 1.5 | 5 | 0 | 0 | 20 | | 310800 | 2900 | 2 | 8 | 0 | 1 | 9 | | 293700 | 2400 | 3 | 6 | 0 | 1 | 11 | | 179000 | 2400 | 2 | 3 | 0 | 1 | 8 | | 188300 | 2100 | 2.5 | 6 | 1 | 1 | 14 | | 227100 | 2900 | 1.5 | 4 | 0 | 0 | 20 | | 173600 | 2100 | 2 | 4 | 0 | 1 | 9 | | 188300 | 2300 | 3 | 5 | 0 | 1 | 11 | | 254300 | 2500 | 2 | 4 | 1 | 1 | 15 | | 207500 | 2100 | 2 | 3 | 1 | 0 | 10 | | 209700 | 2200 | 2 | 4 | 1 | 1 | 19 | | 294000 | 2100 | 2.5 | 2 | 0 | 1 | 13 | | 176300 | 2000 | 2 | 2 | 1 | 0 | 17 | | 294300 | 2400 | 2 | 7 | 0 | 1 | 8 | | 224000 | 1900 | 2 | 3 | 1 | 1 | 6 | | 125000 | 1900 | 1.5 | 2 | 0 | 0 | 18 | | 236800 | 2600 | 2 | 4 | 1 | 1 | 17 | | 164100 | 2300 | 2 | 4 | 0 | 0 | 19 | | 173600 | 2100 | 2.5 | 4 | 1 | 1 | 14 | | 188300 | 2300 | 1.5 | 5 | 0 | 0 | 20 | | 310800 | 2900 | 2 | 8 | 0 | 1 | 9 | | 293700 | 2400 | 3 | 6 | 0 | 1 | 11 | |
By using Minitab, the regression equation is:
Selling Price (in $) = 153678 + 17957 Number of Baths + 9467 Number of Bedrooms
- 22453 Pool (dummy) + 38228 Garage (dummy)
- 1479 Distance to Town Center
The coefficient for Number of Bedrooms is 9467. The following interpretations of the coefficient on the “Number of Bedrooms” variable is correct:
\"On average, the selling price of a house will increase by approximately $9,467 for an additional bedroom (holding the other four variables constant).\"
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