Question
In: Economics
House price and number of bedrooms Suppose that you are provided the following data on house...
House price and number of bedrooms Suppose that you are provided the following data on house prices and the number of bedrooms
selling Price number of bedrooms
400 2
700 4
400 3
Calculate the sample mean for both selling price and mean number of bedrooms.
Calculate the sample standard deviations for both selling price and number of bedrooms.
Calculate the sample covariance between the selling price and the number of bedrooms.
Calculate the sample correlation between the selling price and the number of bedrooms.
Calculate the fraction of the variation in selling price that is explained (or attributed) to the number of bedrooms.
Solutions
Expert Solution
| House price | no. of bedrooms |
| 400 | 2 |
| 400 | 3 |
| 700 | 4 |
(a) Sample mean for house price
Sample mean for number of bedrooms
(b) Sample standard deviation of house prices
Sample standard deviation of number of bedrooms
(c) Sample covariance between the house price and number of bedrooms
| House price | no. of bedrooms |  |
 |
 |
| 400 | 2 | 100 | 1 | 100 |
| 400 | 3 | 100 | 0 | 0 |
| 700 | 4 | -200 | -1 | 200 |
| total | 0 | 0 | 100 |
(d) Sample correlation between the house price and number of bedrooms
(e) To calculate the fraction of the variation in selling price that is explained (or attributed) to the number of bedrooms, we have to find the r-squared value which measures the variation of one variable, say x which explains the variation of the other say y.
Rahul Sunny answered 2 years agoRelated Solutions
The following data gives the selling price, square footage, number of bedrooms, and the age of...
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number of bedrooms, and the age of a house in years. These houses
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Selling Price ($)
Square Footage
Bedrooms
Age (years)
84,000
1,670
2
30
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1,339
2
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127,500
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132,500
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2,311
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164,000
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2) The following data gives the selling price, square footage, number of bedrooms, and the age...
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number of bedrooms, and the age of a house in years. These houses
have been sold in a specific neighborhood over the last six
months.
Selling Price ($)
Square Footage
Bedrooms
Age (years)
84,000
1,670
2
30
79,000
1,339
2
25
91,500
1,712
3
30
120,000
1,840
3
40
127,500
2,300
3
18
132,500
2,234
3
30
145,000
2,311
3
19
164,000
2,377
3
7
155,000
2,736
4
10
168,000...
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to predict the selling price based upon each of the other factors
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no
develop a regression model to predict selling price based on the
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selling...
2) The following data gives the selling price, square footage, number of bedrooms, and the age...
2) The following data gives the selling price, square footage,
number of bedrooms, and the age of a house in years. These houses
have been sold in a specific neighborhood over the last six
months.
Selling Price ($)
Square Footage
Bedrooms
Age (years)
84,000
1,670
2
30
79,000
1,339
2
25
91,500
1,712
3
30
120,000
1,840
3
40
127,500
2,300
3
18
132,500
2,234
3
30
145,000
2,311
3
19
164,000
2,377
3
7
155,000
2,736
4
10
168,000...
The following data gives the selling price, square footage, number of bedrooms, and age (in years)...
The following data gives the selling
price, square footage, number of bedrooms, and age (in years) of
condominiums that were sold in a neighborhood in the Bronx in the
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Selling Price
Square Footage
No. of Bedrooms
Age of Condo
64000
1670
2
30
59000
1339
2
25
61500
1712
3
30
79000
1840
3
40
87500
2300
3
18
92500
2234
3
30
95000
2311
3
19
113000
2377
3
7
115000
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10
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The following data give the selling price, square footage, number of bedrooms, and age of houses...
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number of bedrooms, and age of houses that have sold in a
neighborhood in the past 6 months. Develop three regression models
to predict the selling price based upon each of the other factors
individually. Which of these is best?
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Square Footage
Bedrooms
Age (Years)
84000
1670
2
30
79000
1339
2
25
91500
1712
3
30
120000
1840
3
40
127500
2300
3
18
132500
2234
3
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