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2016

Homework 1
Environmental Economics & Consumer Preferences JEM115
Ulvi Jafarov
1. Calculate the descriptive statistics of all the variables in the dataset (mean
value, median, standard deviation, skewness). Comment on the results for Price,
Greenery and Noise.

From the results we can see that the average Price of the flat is 3,631,800
CZK. The median of this variable is almost the same with mean. The standard
deviation shows us that the Price spread out from the mean for about 1,928,700 CZK.
The skewness value of Price is greater than zero, it means it is right skewed(the same
for Greenery and Noise).
The average distance from the nearest urban greenery is 2.3 km. The median is
enough close to mean, it is almost symmetrical.
The average daily level of noise is 58 dB. Also the median is not far from
mean and the Noise spread out from the mean for about 12.3 dB.
2. What direction of relationship (+/-) do you expect to be observed between each
independent variable and Price? Comment shortly.

All independent variables are negatively related with the Price, except Area. More
accurate, bigger Area, more expensive Prices.

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3. Plot the scatter plot between the variable Price and Greenery. What can you
see from this picture?

From the picture we can see that when distance from the nearest unit of urban
greenery increasing, the price falls.
4. Build up and estimate a linear regression model between (Price) and (Area,
Metro, Center, Greenery, Noise) .

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5.
Briefly interpret the results: coefficients meanings and significance,
comparison with expectations, model fit.

From the p-value and from the stars we can easily see that 3 out of 5
variables are significant. Moreover the coefficients say us that, 1 square meter
increase in Area makes Price to increase by 18942 CZK. The price decreasing for
about 722542 CZK for every 1 km increase in distance from the nearest unit of urban
greenery and decreasing by 56185 CZK for every 1 dB increase in average daily noise
level from road transport. From r-squared we can see that the independent variables
explaining 98.5% of dependent variable, hence clear enough.


6.
Re-estimate the model using only variables significant at 5% significance
level.

7.
From the corrected model (6.), calculate the implicit prices for Greenery and
Noise variables. Interpret the results.

An increase in the distance from urban greenery about 1 km decreases the
price by 673015 CZK.


An increase in the average daily noise from road transport about 1 dB
decreases the price by 51842 CZK.

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8.
Calculate the NSDI. Shortly comment: is the magnitude of the estimate
comparable to other studies?