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QUESTION 28 Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of $s) based on the size of the house expressed in square feet), whether the house has an ocean front view V Ew l ifit has an ocean front view and 0 if not and an interaction term between the ocean front view dummy variable and the size of the house. If the estimated equation is: Price 1,392+ 0.31*Size + 1,987*View +0.05*(Size View) Suppose you just built a house with an ocean front view that is 4300 square feet and you want to decide how much to rent it for. What is the predicted price of a house that is 4300 square feet and has an ocean front view? (please express your answer using 1 decimal places) QUESTION 29 Below is some of the regression output from a regression of the amount rental houses on an island rent for (expressed in thousands of S's) based on the size of the h front view (VIEW 1 if it has an ocean front view and- 0 if not), and an interaction term between ouse (expressed in square feet), whether the hquse has an ocean the ocean front view dummy variable and the size of the house. If the estimated equation is Price -1,479+0.34 Size+1,419 View + 0.07*(Size View) How much more (or less) does a 4000 square foot house that has an ocean front view rent for compared to a similar sized house without an ocean front view? Gif the ocean front house rents for more then express your answer as a POSITIVE number, if the ocean front house rents for less then express your answer as a NEGATIVE number) (please express your answer using 1 decimal places) Click Save and Submit to save and submit. Click Save All Answers to save all answers ave Al
Explanation / Answer
Question 28
Solution:
the estimated equation is,
Price = 1,392 + 0.31*Size + 1,987*View + 0.05*(Size*View)
for size = 4300, then price(ocean front view=1) = 1,392 + 0.31*4300 + 1,987*1 + 0.05*(4300*1) = 4927
for size = 4300, then price(non-ocean front view=0)= 1,392 + 0.31*4300 + 1,987*0 + 0.05*(4300*0) = 2725
ocean front view rent = 4927
without ocean front view rent = 2725
difference=4927-2725=2202
therefore ocean front view has 2202 more rent than without ocean front view
Question 29
Solution:
the estimated equation is,
Price = 1,479 + 0.34*Size + 1,419*View + 0.07*(Size*View)
for size = 4000, then price(ocean front view=1) = 1,479 + 0.34*4000 + 1,419*1 + 0.07*(4000*1) = 4538
for size = 4000, then price(non-ocean front view=0)= 1,479 + 0.34*4000 + 1,419*0 + 0.07*(4000*0) = 2839
ocean front view rent = 4538
without ocean front view rent = 2839
difference=4538-2839 =1699
therefore ocean front view has 1699 more rent than without ocean front view