SCENARIO 13-4
a Real Estate Builder Wishes to Determine How

question 148

Short Answer

SCENARIO 13-4
A real estate builder wishes to determine how house size (House) is influenced by family income (Income) and family size (Size).House size is measured in hundreds of square feet and income is measured in thousands of dollars.The builder randomly selected 50 families and ran the multiple regression.Partial Microsoft Excel output is provided below: $\begin{array}{lr}\hline{\text { Regression Statistics }} \\\hline \text { Multiple R } & 0.8479 \\\text { R Square } & 0.7189 \\\text { Adjusted R Square } & 0.7069 \\\text { Standard Error } & 17.5571 \\\text { Observations } & 50\\\hline \end{array}$

$\text { ANOVA }$
$\begin{array}{lrrrrr} & d f & \text { SS } & {M S} & F & \text { Significance } F \\\hline \text { Regression } & & & 37043.3236 & 18521.6618 & 0.0000 \\\text { Residual } & & 14487.7627 & 308.2503 & \\\text { Total } & & 49 & 51531.0863 & &\end{array}$

$\begin{array}{lrrrr}\hline & \text { Coefficients } & \text { Standard Error } &{t \text { Stat }} & \text { P-value } \\\hline \text { Intercept } & -5.5146 & 7.2273 & -0.7630 & 0.4493 \\\text { Income } & 0.4262 & 0.0392 & 10.8668 & 0.0000 \\\text { Size } & 5.5437 & 1.6949 & 3.2708 & 0.0020\\\hline \end{array}$

$\text { Also } \operatorname{SSR}\left(X_{1} \mid X_{2}\right)=36400.6326 \text { and } \operatorname{SSR}\left(X_{2} \mid X_{1}\right)=3297.7917$


-Referring to SCENARIO 13-4, what annual income (in thousands of dollars) would an individual with a family size of 9 need to attain a predicted 5,000 square foot home (House = 50)?

---

Definitions:

Polar Covalent Bond

A type of chemical bond where electrons are unequally shared between atoms, leading to partial electric charges.

Covalently Bonded

Atoms that are linked together by sharing pairs of electrons to achieve stability.

Ionic Bond

Type of chemical bond in which a strong mutual attraction links ions of opposite charge.

Chemical Bond

Attractive force that arises between two atoms when their electrons interact; links atoms into molecules.