28. Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of $'s) based on the size of the house (expressed in square feet), whether the house has an ocean front view (VIEW = 1 if it has an ocean front view and = 0 if not), and an interaction term between the ocean front view dummy variable and the size of the house. If the estimated equation is: Price = 1,251 + 0.34*Size + 1,538*View + 0.07*(Size*View) Suppose you just built a house with an ocean front view that is 3600 square feet and you want to decide how much to rent it for. What is the predicted price of a house that is 3600 square feet and has an ocean front view? (please express your answer using 1 decimal places)
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
28. Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of $'s) based on the size of the house (expressed in square feet), whether the house has an ocean front view (VIEW = 1 if it has an ocean front view and = 0 if not), and an interaction term between the ocean front view dummy variable and the size of the house. If the estimated equation is:
Price = 1,251 + 0.34*Size + 1,538*View + 0.07*(Size*View)
Suppose you just built a house with an ocean front view that is 3600 square feet and you want to decide how much to rent it for. What is the predicted price of a house that is 3600 square feet and has an ocean front view? (please express your answer using 1 decimal places)
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