A local real estate agent argues that house prices in Pittsburgh are related to the number of rooms in a house. You collect a random sample of 190 houses and run a simple regression using House Price (measured in dollars) as the dependent variable and Rooms (measured as the number of rooms in a house) as the independent variable. Given below is the Excel output of the regression results. (a) Construct the 99.7% confidence interval for the slope of the regression line. (b) Consider a house with 5 room. What is the probability that the house will sell for more than $270,245? (c) A savvy real estate investor, Noah, owns a house in Pittsburgh that he is planning to sell. Based on the regression put, Noah decides to destroy some walls to reduce the number of rooms in the house, hoping to increase the house selling price. Based on the regression output, do you think this is a good decision? Justify your comment.
A local real estate agent argues that house prices in Pittsburgh are related to
the number of rooms in a house. You collect a random sample of 190 houses and run a
simple regression using House Price (measured in dollars) as the dependent variable
and Rooms (measured as the number of rooms in a house) as the independent
variable. Given below is the Excel output of the regression results.
(a) Construct the 99.7% confidence interval for the slope of the regression
line.
(b) Consider a house with 5 room. What is the
will sell for more than $270,245?
(c) A savvy real estate investor, Noah, owns a house in Pittsburgh that
he is planning to sell. Based on the regression put, Noah decides to destroy some
walls to reduce the number of rooms in the house, hoping to increase the house
selling price. Based on the regression output, do you think this is a good decision?
Justify your comment.
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