Stats Solutions

[Solution] A real estate developer is interested in the relationship between the price of houses in Melbourne and their distance to the CBD. Using data

Question: A real estate developer is interested in the relationship between the price of houses in Melbourne and their distance to the CBD. Using data collected from real estate agents, he performed the following simple linear regression model:

\[{{Y}_{i}}={{\beta }_{0}}+{{\beta }_{1}}{{X}_{i}}+{{e}_{i}}\]

where the dependent variable ( Y ) is the price of houses (measured in thousands of Australian dollars); the explanatory variable ( X ) is the distance to the CBD (measured

in km); \({{\beta }_{0}}\) and \({{\beta }_{1}}\) are unknown parameters; and e is the disturbance term. The regression results are given in the following Table.

  1. What are the values of A and B?
  2. What is the interpretation of the two parameter estimates? Do they correspond to your expectation?
  3. What are the predicted prices for a house in Burwood, which is 13 km from the CBD and a house in Yarra Glen, which is 65 km from the CBD? Are these predictions reliable?
  4. Find and interpret the value of the coefficient of determination.

Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


∴ Other downloads you may be interested in ∴

log in to your account

Forgot password?
Don't have a membership account?
REGISTER

reset password

Back to
log in

sign up

Back to
log in