Please Answer all parts of the question and show your work! You decide to estima
ID: 1161542 • Letter: P
Question
Please Answer all parts of the question and show your work!
You decide to estimate the regression using the number of parks per 1,000 households (HHs). You get the following result. 5. houseprice 184,000+500,000parksperthous, a. Interpret the coefficient on parks per thousand HHs. b. What is the predicted house price in a city with 10 parks and 20,000 households? c. What is the predicted house price in New York if there are 1,700 parks and 8 million people? How does this compare to your answer in part 3e)? Which estimate do you think is more accurate?Explanation / Answer
(a) The coefficient signifies that if there are no parks, price of the house would be 184,000. This is the minimum possible price.
(b) Park per thousand household = 10/20 = 0.5
Predicted house price = 184,000 + 500,000 x 0.5 = 184,000 + 250,000 = 434,000
(c) Park per household = 1,700/(8,000,000/1,000) = 0.2125
Predicted house price = 184,000 + 500,000 x 0.2125 = 184,000 + 106,250 = 290,250
NOTE: Since part (3e) is not provided, comparison cannot be made.