A Realtor Wants to Predict and Compare the Prices of Homes

question 53

Essay

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 + β₁Size + β₂Age + ε
Model B: Price = β₀ + β₁ Size + β₃ Loc1 + β₄ Loc2 + ε
Model C: Price = β₀ + β₁Size + β₂Age + 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,what is the conclusion for testing the joint significance of the two dummy variables at the 1% significance level?

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Definitions:

Performance Appraisal

A regular review and evaluation of an individual's job performance and overall contribution to an organization.

Employee Empowerment

The practice of giving employees the authority, tools, and resources to make decisions and contribute to the company's success.

Organizational Culture

The shared values, beliefs, and practices that shape the social and psychological environment of a business, influencing employee behavior and company operations.

Job Design

The process of organizing tasks, duties, and responsibilities into a productive unit of work to enhance job satisfaction and performance.