Question

The data relating the square feet for the living space and the selling price of 12 residential properties given in example 3.5 are reproduced here.

X	Y
1360	178.5
1940	275.7
1750	239.5
1550	229.8
1790	195.6
1750	210.3
2230	360.5
1600	205.2
1450	188.6
1870	265.7
2210	325.3
1480	168.8

What is the y-intercept of the best fitting line?

	1.	-106.6
	2.	0.196
	3.	-0.196
	4.	106.6

Answer 1

The regression line that we want to fit is

where is the y-intercept of the regression line

is the slope coefficient of the regression line

is a random error

We will estimate the coefficients manually, without using any software

First we calculate the following

sample emans

Sum of squares

The estimate of slope is

The estimate of intercept is

ans: The y-intercept of the best fitting line is 1: -106.06 (Note that it is not -106.6, that must be a typo)