A Realtor Wants to Predict and Compare the Prices of Homes

question 53

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 C, define the alternative hypothesis for testing the individual significance of Age.

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Definitions:

Electron Density

A measure of the probability of an electron being present at a specific location around an atom or molecule.

Octahedron

A polyhedron with eight faces, usually referring to a regular octahedron with eight equilateral triangles as faces.

Electron Density

A measure of the probability of an electron being present at a specific location, often used in quantum chemistry and crystallography.

Octahedron

A three-dimensional geometric figure with eight faces, usually referring to a regular octahedron with all faces that are equilateral triangles.