Samuel Perkins 3903682

Assignment 1

Q1.

Assuming all other factors held constant. For all coefficients Ho: Bi = 0 and Ha: Bi ≠ 0

For every additional sale per month, the price of a house increases by 0.92%. P value is less than all
significance levels therefore we can reject ho and conclude that salemonth has a statistically
significant effect on price.

For every additional square metre of floor space, the price of a house increases by 0.87%. P value is
less than all significance levels therefore we can reject ho and conclude that floorarea has a
statistically significant effect on price.

For every additional metre of floor area squared, the price of a house decreases by 0.0014%. P value
is less than all significance levels therefore we can reject ho and conclude that floorarea2 has a
statistically significant effect on price. This combined with floorarea shows a diminishing affect to
additional square metres.

For every additional square metre of land, the price of a house decreases by 0.00045%. P value is
greater than all significance levels therefore we cannot reject ho and conclude that landarea does
not has a statistically significant effect on price.

For every increase in decade, the price of a house increases by 0.11%. P value is less than all
significance levels therefore we can reject ho and conclude that decadeblt has a statistically
significant effect on price.

For every additional kilometre away the house is located from the octagon, the price decreases by
5.5%. P value is less than all significance levels therefore we can reject ho and conclude that
doctdrive has a statistically significant effect on price.

For every additional dollar increase in median 2006 census block household income, the price of a
house increases by 0.00059%, or for more economical interpretation, for every $10,000 increase in
median block household income, the price of a house will increase by 5.9%. P value is less than all
significance levels therefore we can reject ho and conclude that medhhinc06 has a statistically
significant effect on price.

If a household has access to good water, the price of a house increases 1.9%. P value is greater than
all significance levels therefore we cannot reject ho and conclude that goodwater does not have a
statistically significant effect on price.

Q2.

Manual test = 6.7636046 prob 0.00121927 Built in F Test = 6.76 prob 0.0012

Ho: Bsunhours = Bgoodother = 0 Ha: At least one does not = 0

Both the manual test and the built-in test display the same values of 6.76 and 0.0012. 0.0012 is less
than alpha of 1% therefore we can reject Ho and conclude that sunhours and goodother are jointly
significant.

Q3.

P value = .07510972
Samuel Perkins 3903682

Value is significant at 8% level of significance, therefore we can conclude that goodwater has a weak
affect on the price of a house, but is not statistically significant at 5% or 1%.

Q4. A relatively large correlation of .2648 appears between goodwater and medhhinc06 which is not
surprising as a family with a higher income is more likely to have a more prestigious house with a
water view. When we drop medhhinc06, the coefficient on goodwater increases, showing a 10.2%
increase in house price if the house has a good water view. The p value obtained is now less than all
significance levels concludeing that goodwater has a statistically significant affect on house price.