A real estate agency collects data concerning the sales of a house (in thousands of dollars) and the home size (in hundreds of square feet). The data are given in the table below. Sales Price (Y, $1,000) Home Size (X, 100 sf)______ 180 23 98.1 11 173.1 20 136.5 17 141 15 165.9 21 193.5 24 127.8 13 , , , (a) Develop an estimated regression equation for these data. (b) What is the economic implication of the model? (c) If a house has 2,500 square feet, what is your prediction of the sales price? (Note: For your convenience, you can copy/ paste the following notations.)
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
A real estate agency collects data concerning the sales of a house (in thousands of dollars) and the home size (in hundreds of square feet). The data are given in the table below.
Sales Price (Y, $1,000) Home Size (X, 100 sf)______
180 23 98.1 11
173.1 20
136.5 17
141 15
165.9 21
193.5 24
127.8 13
, , ,
(a) Develop an estimated regression equation for these data.
(b) What is the economic implication of the model?
(c) If a house has 2,500 square feet, what is your prediction of the sales price?
(Note: For your convenience, you can copy/ paste the following notations.)
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