A Realtor Wants to Predict and Compare the Prices of Homes

question 14

Short Answer

A realtor wants to predict and compare the prices of homes in three neighboring locations. She considers the following linear models:
Model A: Price = β₀ + β₁ Size + β₂ Age + ε
Model B: Price = β₀ + β₁ Size + β₃ Loc1 + β₄ Loc2 + ε
Model C: Price = β₀ + β₁ Size + β₂ Age + β₃ Loc1 + β₄ Loc2 + ε
where,
Price = the price of a home (in $1,000s)
Size = the square footage (in sq. feet)
Loc1 = a dummy variable taking on 1 for Location 1, and 0 otherwise
Loc2 = a dummy variable taking on 1 for Location 2, and 0 otherwise
After collecting data on 52 sales and applying regression, her findings were summarized in the following table. Note: The values of relevant test statistics are shown in parentheses below the estimated coefficients.
Using Model B, compute the predicted difference between the price of homes with the same square footage located in Location 2 and Location 3.

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Definitions:

"I-Thou" Relationship

A concept from philosophy that emphasizes mutual respect, recognition, and valuing the other person as a distinct and valuable being, beyond merely instrumental or utilitarian considerations.

Shared Future

A concept emphasizing the idea that different groups or individuals envision and work towards a common goal or destiny, often in the context of sustainability and global cooperation.

Asexual

Pertaining to a lack of sexual attraction to others, where an individual has no interest in or desire for sexual activity.

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Experiencing a form of attraction towards another individual that is primarily based on sexual desire or the desire for sexual activity with that person.