Real Estate Regression Exercise

QNT/351 Version 5
1. The listing price is the dependent variable X ,
and the square footage is the independent Y varialble
2.

Majority of points in the scatter plot lies almost in a straight line. This suggest of high correlation
between variables.
Also the point are upward sloping which suggest of positive linear relationship.
Yes there is a strong correlation with an increase in price there is also an increase in square
footage. The line has a positive slope.
3.
(a)

Regression Statistics
0.81450377
Multiple R
3
0.66341639
R Square
7
Adjusted R Square 0.65998187

(b)
Yes. Correlation is 0.8145 which is strong correlation as suggested in #2 above. Correlation is
also positive and this indicated of positive relationship and thus the slope will be positive
(c)

proportion of the variation in listing price is due to Square footage is given by Rsquared=0.663416=66.3416%
Due to other factors=1-0.663416=0.336584=33.6584%
(d)

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Real Estate Regression Exercise

QNT/351 Version 5

Intercept
Square
Footage

Coefficient
s
165440.73
28
161.75565
84
Y=165440.7328+161.7556584X

(e)
H0: b1=0
Ha: b10

Coefficients
Square
Footage

161.7556584

Standard
Error

t Stat

11.63857531

13.89823531

Pvalue
6.6E25

Since the p value is very small that is <0.05, reject H0 and conclude that there is a
significant relationship between the variables

(f)
Y=165440.7328+161.7556584X
Y=165440.7328+161.7556584(2100)=505127.61544

Copyright 2016 by University of Phoenix. All rights reserved.