Question: Use the following regression output to answer the questions below. The data come from a sample of 142 homes from a city in New Jersey. This is an example of a hedonic price model for houses, which are often used in real estate appraisal and assessing house values for taxation purposes. In most models like this the dependent variable would be the log of the house price, but we are not covering how to interpret regressions where the dependent variable is a log transformation. Therefore, the dependent variable is the selling price of the home.

The variables in the regression are:

a) Give an example of a research question you could address using these regression results.

b) Perform the hypothesis test necessary to address the research question you came up with in part a.

c) Interpret the coefficient of area in plain English (Hint: “On average and holding …”). Is this coefficient statistically significant?

d) Interpret the coefficient of NearInst in plain English (Hint: “On average and holding …”). Is this coefficient statistically significant?