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Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions?

Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
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Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below.

A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions.

According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions? 

Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions?
Transcribed Image Text:Suppose a researcher collects data on houses that have been sold in a particular neighbourhood over the past year, and obtains the regressions results in the table shown below. A family purchases a 2000 square foot home and plans to make extensions totalling 500 square feet. The house currently has a pool, and a real estate agent has reported that the house is in excellent condition. However, the house does not have a view, and this will not change as a result of the extensions. According to the results in column (1), what is the expected DOLLAR increase in the price of the home due to the planned extensions?
Dependent variable: In (Price) Regressor Size In(Size) In(Size)² Bedrooms Pool View Pool X View Condition Intercept Summary Statistics SER (1) 0.00042 (0.000038) 0.082 (0.032) 0.037 (0.029) 0.13 (0.045) 10.97 (0.069) (2) 0.69 (0.054) 0.071 (0.034) 0.027 (0.028) 0.12 (0.035) 6.60 (0.39) (3) 0.68 (0.087) 0.0036 (0.037) 0.071 (0.034) 0.026 (0.026) 0.12 (0.035) 6.63 (0.53) (4) 0.57 (2.03) 0.0078 (0.14) 0.071 (0.036) 0.027 (0.029) 0.12 (0.036) 7.02 (7.50) 0.099 (5) 0.73 0.69 (0.055) 0.071 (0.035) 0.027 (0.030) 0.0022 (0.10) 0.12 (0.035) 6.60 (0.40) 0.102 0.098 0.099 R² 0.72 0.74 0.73 Variable definitions: Price = sale price ($); Size = house size (in square feet); Bedrooms = number of bedrooms; Pool=binary variable (1 if house has a swimming pool, 0 otherwise); View = binary variable (1 if house has a nice view, 0 otherwise); Condition binary variable (1 if real estate agent reports house is in excellent condition, 0 otherwise). 0.099 0.73
Transcribed Image Text:Dependent variable: In (Price) Regressor Size In(Size) In(Size)² Bedrooms Pool View Pool X View Condition Intercept Summary Statistics SER (1) 0.00042 (0.000038) 0.082 (0.032) 0.037 (0.029) 0.13 (0.045) 10.97 (0.069) (2) 0.69 (0.054) 0.071 (0.034) 0.027 (0.028) 0.12 (0.035) 6.60 (0.39) (3) 0.68 (0.087) 0.0036 (0.037) 0.071 (0.034) 0.026 (0.026) 0.12 (0.035) 6.63 (0.53) (4) 0.57 (2.03) 0.0078 (0.14) 0.071 (0.036) 0.027 (0.029) 0.12 (0.036) 7.02 (7.50) 0.099 (5) 0.73 0.69 (0.055) 0.071 (0.035) 0.027 (0.030) 0.0022 (0.10) 0.12 (0.035) 6.60 (0.40) 0.102 0.098 0.099 R² 0.72 0.74 0.73 Variable definitions: Price = sale price ($); Size = house size (in square feet); Bedrooms = number of bedrooms; Pool=binary variable (1 if house has a swimming pool, 0 otherwise); View = binary variable (1 if house has a nice view, 0 otherwise); Condition binary variable (1 if real estate agent reports house is in excellent condition, 0 otherwise). 0.099 0.73
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Suppose a different family purchases a 2,500 square foot house, and also plans to undertake extensions that will increase the total size of the house by 500 square feet. Again, use the results in column (1), and assume the house has a pool, is in excellent condition, but does not have a view (which will not change after the extensions). Without performing any further calculations, what are you able to conclude about the expected impact of the extensions on this house? a. Both the estimated dollar increase and the estimated percentage increase in price would be the same as for the house described in previous question. b. The estimated percentage increase in price would be the same as for the house described in previous question, but the estimated dollar increase would be higher. C. Both the estimated dollar increase and the estimated percentage increase in price would be higher than for the house described in previous question. d. The estimated percentage increase in price would be the same as for the house described in previous question, but the estimated dollar increase would be lower.
Transcribed Image Text:Suppose a different family purchases a 2,500 square foot house, and also plans to undertake extensions that will increase the total size of the house by 500 square feet. Again, use the results in column (1), and assume the house has a pool, is in excellent condition, but does not have a view (which will not change after the extensions). Without performing any further calculations, what are you able to conclude about the expected impact of the extensions on this house? a. Both the estimated dollar increase and the estimated percentage increase in price would be the same as for the house described in previous question. b. The estimated percentage increase in price would be the same as for the house described in previous question, but the estimated dollar increase would be higher. C. Both the estimated dollar increase and the estimated percentage increase in price would be higher than for the house described in previous question. d. The estimated percentage increase in price would be the same as for the house described in previous question, but the estimated dollar increase would be lower.
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