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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. 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
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
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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