QUESTION 2 SCENARIO 13-4 A real estate builder wishes to determine how house siz

Question

QUESTION 2 SCENARIO 13-4 A real estate builder wishes to determine how house size (House) is influenced by family income (Income) and family size (Size).House size is measured in hundreds of square feet and income is measured in thousands of dollars. The builder randomly selected 50 families and ran the multiple regression. Partial Microsoft Excel output is provided below: Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.8479 0.7189 0.7069 17.5571 50 ANOVA Significance F 0.0000 MS Regression Residual Total 37043.3236 14487.7627 51531.0863 18521.6618 308.2503 49 Coefficients Standard Error t Stat P-value Intercept Income Size 5.5146 0.4262 5.5437 7.2273 0.0392 1.6949 0.7630 10.8668 3.2708 0.4493 0.0000 0.0020 Also SSR(XX) 36400.6326 and SSR(X2X) 3297.7917 Referring to Scenario 13-4, what is the predicted house size (in hundreds of square feet)for an individual earning an annual income of S40,000 and having a family size of 4? Your answer should include two digits after the decimal.

Explanation / Answer

Solution- 2.

Regression equation is -

House size = -5.5146 + 0.4262 Income + 5.5437 family size

When income = 40000 and family size = 4

the predicted value of house size would be -

= -5.5146 + 0.4262 * 40000 + 5.5437 * 4

= 17064.66

3. When house size is 10000 and family size = 4 then family income should be -

10000 = -5.5146 + 0.4262 Income + 5.5437 *4

Solving for income, we get-

FAmily income = 23424.07

4. When house size is 5000 and family size = 9 then family income should be -

5000 = -5.5146 + 0.4262 Income + 5.5437 *9

Solving for income, we get-

FAmily income = 11627.45

Answers

TY!

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