A Realtor Wants to Predict and Compare the Prices of Homes

question 38

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,define the null hypothesis for testing the joint significance of the two dummy variables?

---

Definitions:

Chronic Pain

Persistent or recurring pain lasting for an extended period, often beyond the typical healing time for an injury or illness.

Opioid Analgesic

A type of medication used to relieve moderate to severe pain by acting on the nervous system.

Selective Serotonin Reuptake Inhibitor

A class of drugs commonly used to treat depression and anxiety disorders by increasing levels of serotonin in the brain.

Selective Norepinephrine Reuptake Inhibitor

A type of medication that specifically targets and inhibits the reuptake of norepinephrine, used in the treatment of depression and certain anxiety disorders.