Suppose You Have the Following Regression Results from a Regression

question 29

Multiple Choice

Suppose you have the following regression results from a regression of home prices on house attributes for a random sample of house transactions: $$\begin{array} { | l | r | r | } \hline & \text { Coefficierts } & \text { Stardard Error } \\\hline \text { Iratercept } & 16310.0 & 4114.5 \\\hline \text { Nurrber of Bedroorrs } & 7295.3 & 1399 . \\\hline \text { Number of Bathroorrs } & 23473.0 & 4032.0 \\\hline\end{array}$$ r-squared = 0.302 Adjusted r-squared = 0.299 If we assume that the proper model to predict the market value of houses is given by this regression, and thus we are getting unbiased estimates of the true relationships between number of bedrooms/bathrooms and sales price, what is the effect on sales price of increasing the number of bathrooms in a house by one, holding number of bedrooms fixed?

• A) Approximately, $16,310 dollars.
• B) Approximately, $ 7,295 + 23,473 = $30,768.
• C) Approximately, $23,473.
• D) Approximately, an increase of 30%.

---

Definitions:

Diaphragm

A large, dome-shaped muscle located at the base of the lungs that plays a key role in breathing by contracting and expanding the thoracic cavity.

Backflow

The flow of a fluid in a direction opposite to its usual or intended direction, often causing contamination or malfunction in plumbing or in bodily systems.

Valves

Structures present in the heart and veins that maintain unidirectional flow of blood by opening and closing in response to pressure differences.

Venous Valves

Structures within veins that prevent the backward flow of blood, crucial for blood returning to the heart.