STATISTICS F/BUSINESS+ECONOMICS-TEXT
13th Edition
ISBN: 9781305881884
Author: Anderson
Publisher: CENGAGE L
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Chapter 14.8, Problem 49E
In 2011 home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the
| City | Rent ($) | Mortgage ($) |
| Atlanta | 840 | 539 |
| Chicago | 1062 | 1002 |
| Detroit | 823 | 626 |
| Jacksonville, Fla. | 779 | 711 |
| Las Vegas | 796 | 655 |
| Miami | 1071 | 977 |
| Minneapolis | 953 | 776 |
| Orlando, Fla. | 851 | 695 |
| Phoenix | 762 | 651 |
| St. Louis | 723 | 654 |
- a. Develop the estimated regression equation that can be used to predict the monthly mortgage given the average asking rent.
- b. Construct a residual plot against the independent variable.
- c. Do the assumptions about the error term and model form seem reasonable in light of the residual plot?
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Chapter 14 Solutions
STATISTICS F/BUSINESS+ECONOMICS-TEXT
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