1. Use the dataset "hpricel" (of the Wooldridge package) to estimate the model: Bo+Bisqrft + B₂bdrms + u, where price is the house price measured in thousands of dollars, sqrft is the square footage of the house, and bdrms is the number of bedrooms. price = (a) Write out the results in equation form. Report your regression results in the same format as in the lecture notes, making sure to include the estimates for Bo, B1, B2, their respective standard errors, n, and R². [3 points] (b) Interpret the coefficient estimate of 3₁. [1 point] (c) What is the estimated increase in price for a house with one more bedroom, holding square footage constant? [1 point] (d) What is the estimated increase in price for a house with an additional bedroom that is 150 square feet in size (in other words, by how much will the average price increase if the bedroom of size 150 square feet is added)? Compare this to your answer in part (c) and explain the difference or similarity in answers between (c) and (d). [2 points] (e) What percentage of the variation in price is explained by square footage and the number of bedrooms? [1 point] (f) One of the houses in the sample has sqrft = 3,438 and bdrms = 5. Find the predicted selling price for this house from the OLS regression line. [1 point]
1. Use the dataset "hpricel" (of the Wooldridge package) to estimate the model: Bo+Bisqrft + B₂bdrms + u, where price is the house price measured in thousands of dollars, sqrft is the square footage of the house, and bdrms is the number of bedrooms. price = (a) Write out the results in equation form. Report your regression results in the same format as in the lecture notes, making sure to include the estimates for Bo, B1, B2, their respective standard errors, n, and R². [3 points] (b) Interpret the coefficient estimate of 3₁. [1 point] (c) What is the estimated increase in price for a house with one more bedroom, holding square footage constant? [1 point] (d) What is the estimated increase in price for a house with an additional bedroom that is 150 square feet in size (in other words, by how much will the average price increase if the bedroom of size 150 square feet is added)? Compare this to your answer in part (c) and explain the difference or similarity in answers between (c) and (d). [2 points] (e) What percentage of the variation in price is explained by square footage and the number of bedrooms? [1 point] (f) One of the houses in the sample has sqrft = 3,438 and bdrms = 5. Find the predicted selling price for this house from the OLS regression line. [1 point]
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![1. Use the dataset "hpricel" (of the Wooldridge package) to estimate the model:
Bo+Bisqrft + B₂bdrms + u,
where price is the house price measured in thousands of dollars, sqrft is the square footage
of the house, and bdrms is the number of bedrooms.
price
=
(a) Write out the results in equation form. Report your regression results in the same
format as in the lecture notes, making sure to include the estimates for Bo, B1, B2,
their respective standard errors, n, and R². [3 points]
(b) Interpret the coefficient estimate of 3₁. [1 point]
(c) What is the estimated increase in price for a house with one more bedroom, holding
square footage constant? [1 point]
(d) What is the estimated increase in price for a house with an additional bedroom that
is 150 square feet in size (in other words, by how much will the average price increase
if the bedroom of size 150 square feet is added)? Compare this to your answer in
part (c) and explain the difference or similarity in answers between (c) and (d). [2
points]
(e) What percentage of the variation in price is explained by square footage and the
number of bedrooms? [1 point]
(f) One of the houses in the sample has sqrft = 3,438 and bdrms = 5. Find the predicted
selling price for this house from the OLS regression line. [1 point]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9d72d65-15d4-4551-b00a-ff66f252ed48%2F1e7968ef-88d4-45f0-899f-32f5e50faa31%2Fh7xb2lu_processed.png&w=3840&q=75)
Transcribed Image Text:1. Use the dataset "hpricel" (of the Wooldridge package) to estimate the model:
Bo+Bisqrft + B₂bdrms + u,
where price is the house price measured in thousands of dollars, sqrft is the square footage
of the house, and bdrms is the number of bedrooms.
price
=
(a) Write out the results in equation form. Report your regression results in the same
format as in the lecture notes, making sure to include the estimates for Bo, B1, B2,
their respective standard errors, n, and R². [3 points]
(b) Interpret the coefficient estimate of 3₁. [1 point]
(c) What is the estimated increase in price for a house with one more bedroom, holding
square footage constant? [1 point]
(d) What is the estimated increase in price for a house with an additional bedroom that
is 150 square feet in size (in other words, by how much will the average price increase
if the bedroom of size 150 square feet is added)? Compare this to your answer in
part (c) and explain the difference or similarity in answers between (c) and (d). [2
points]
(e) What percentage of the variation in price is explained by square footage and the
number of bedrooms? [1 point]
(f) One of the houses in the sample has sqrft = 3,438 and bdrms = 5. Find the predicted
selling price for this house from the OLS regression line. [1 point]
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