A Study Investigated the Impact of House Price Appreciation on Household

question 27

Essay

A study investigated the impact of house price appreciation on household mobility.The
underlying idea was that if a house were viewed as one part of the household's portfolio,
then changes in the value of the house, relative to other portfolio items, should result in
investment decisions altering the current portfolio.Using 5,162 observations, the logit
equation was estimated as shown in the table, where the limited dependent variable is one
if the household moved in 1978 and is zero if the household did not move:
14 $$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Regression } \\\text { model }\end{array} & \text { Logit } \\\hline \text { constant } & - 3.323 \\& ( 0.180 ) \\\hline \text { Male } & - 0.567 \\& ( 0.421 ) \\\hline \text { Black } & - 0.954 \\& ( 0.515 ) \\\hline \text { Married } 78 & 0.054 \\& ( 0.412 ) \\\hline \text { marriage } & 0.764 \\\text { change } & ( 0.416 ) \\\hline \text { A7983 } & - 0.257 \\& ( 0.921 ) \\\hline \text { PNRN } & - 4.545 \\& ( 3.354 ) \\\hline \text { Pseudo- } \mathrm { R } ^ { 2 } & 0.016 \\\hline\end{array}$$ where male, black, married78, and marriage change are binary variables.They indicate,
respectively, if the entity was a male-headed household, a black household, was married,
and whether a change in marital status occurred between 1977 and 1978.A7983 is the
appreciation rate for each house from 1979 to 1983 minus the SMSA-wide rate of
appreciation for the same time period, and PNRN is a predicted appreciation rate for the
unit minus the national average rate.
(a)Interpret the results.Comment on the statistical significance of the coefficients.Do the
slope coefficients lend themselves to easy interpretation?

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Definitions:

Fitness

In evolutionary biology, refers to an organism's ability to survive, reproduce, and pass its genes to the next generation.

Neurons

Nerve cells that are the basic building blocks of the nervous system, responsible for receiving sensory input from the external world, sending motor commands to our muscles, and transforming and relaying the electrical signals at every step in between.

Environment

The surrounding physical, chemical, and biological factors and conditions that influence the growth, development, and survival of organisms.

Behavior

The actions or reactions of an organism, often in response to its environment.