The following model studies the effect that a chemical spill disaster had on nearby housing values. They used data from a sample of houses sold in 1980, before chemical spill disaster happened, and a separate sample of houses sold in 1985, after chemical spill had occurred. log(price) ao + Boy85+ afar + B₁y85 * far + u where the variables used in the analysis are: log(price) is natural log of selling price in $ y85 is a dummy variable equal to 1 if a house was sold in 1985, 0 otherwise far is a dummy variable equal to 1 if a house was far from the affected area. O otherwise If the chemical spill reduces the value of houses closer to the affected area, which of the following statement i correct? Select one: O a. a₁ is expected to be positive O b. a₁ is expected to be negative O c. B₁ is expected to be positive O d. B₁ is expected to be negative
The following model studies the effect that a chemical spill disaster had on nearby housing values. They used data from a sample of houses sold in 1980, before chemical spill disaster happened, and a separate sample of houses sold in 1985, after chemical spill had occurred. log(price) ao + Boy85+ afar + B₁y85 * far + u where the variables used in the analysis are: log(price) is natural log of selling price in $ y85 is a dummy variable equal to 1 if a house was sold in 1985, 0 otherwise far is a dummy variable equal to 1 if a house was far from the affected area. O otherwise If the chemical spill reduces the value of houses closer to the affected area, which of the following statement i correct? Select one: O a. a₁ is expected to be positive O b. a₁ is expected to be negative O c. B₁ is expected to be positive O d. B₁ is expected to be negative
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 15PPS
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![The following model studies the effect that a chemical spill disaster had on nearby housing values. They used data from a sample of houses sold in 1980, before chemical spill disaster happened, and a separate sample of
houses sold in 1985, after chemical spill had occurred.
where the variables used in the analysis are:
log(price) is natural log of selling price in $
y85 is a dummy variable equal to 1 if a house was sold in 1985, 0 otherwise
far is a dummy variable equal to 1 if a house was far from the affected area, 0 otherwise
If the chemical spill reduces the value of houses closer to the affected area, which of the following statement is correct?
Select one:
O a. a₁ is expected to be positive
O b.
O c.
O d.
log(price) = a + Boy85 + a₁ far + B₁y85 * far + u
a₁ is expected to be negative
B₁ is expected to be positive
B₁ is expected to be negative](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0fb384a7-9a4c-40c1-b323-d39d9a3fd15b%2Feaef44d2-aad6-4d56-9d9e-aeaa2873b2af%2Fospclv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following model studies the effect that a chemical spill disaster had on nearby housing values. They used data from a sample of houses sold in 1980, before chemical spill disaster happened, and a separate sample of
houses sold in 1985, after chemical spill had occurred.
where the variables used in the analysis are:
log(price) is natural log of selling price in $
y85 is a dummy variable equal to 1 if a house was sold in 1985, 0 otherwise
far is a dummy variable equal to 1 if a house was far from the affected area, 0 otherwise
If the chemical spill reduces the value of houses closer to the affected area, which of the following statement is correct?
Select one:
O a. a₁ is expected to be positive
O b.
O c.
O d.
log(price) = a + Boy85 + a₁ far + B₁y85 * far + u
a₁ is expected to be negative
B₁ is expected to be positive
B₁ is expected to be negative
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