Please I need to write down the entire answers. Please show me the all work, not
ID: 2931559 • Letter: P
Question
Please I need to write down the entire answers. Please show me the all work, not just the answers. Please try your best to be clear. Answer the complete question that contains A,B,C,and D.
House price y is estimated as a function of the square footage of a house, x, and a dummy variable, d, that equals 1 if the house has ocean views. The estimated house, price, measured in thousands of US dollars is given by: = 118.9 .12x 52.6d 6. a. Compute the predicted price of two houses with ocean views and square footage of b. Compute the predicted price of two houses without ocean views and square footage of c. Discuss the impact of ocean views on the house price 2,000 and 3,000 respectively. 2,000 and 3,000 respectively Suppose all of the houses in the sample are located in 5 states. Due to differences in the capitalization of property taxes in these states the researcher would like to include a series of dummy variables to account for the state in which the sale was made. If the sample contains houses from 5 states how many dummy variables must the researcher include to capture the sale price differences due to the state of sale (only include the number of new dummy variables, do not count, d, as a dummy variable in this answer) d.Explanation / Answer
a) Given Y-cap = 118.9 + 0.12x + 52.6d
Square footage x = 2000, ocean views = 1
Y-cap = 118.9 + 0.12(2000) + 52.6(1) = 411.5
Square footage x = 3000, ocean views = 1
Y-cap = 118.9 + 0.12(3000) + 52.6(1) = 531.5
b) Given without ocean views and Square footage x = 2000,
Y-cap = 118.9 + 0.12(2000) + 52.6(0) = 358.9
Square footage x = 3000, ocean views = 0
Y-cap = 118.9 + 0.12(3000) + 52.6(0) = 478.9
c) Every 1000 square footage increase the price of a house increase 0.12*1000 = $120 increase
d) There are 4 dummy variables required