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
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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 ($)
Square Footage
Bedrooms
Age (years)
84,000
1,670
2
30
79,000
1,339
2
25
91,500
1,712
3
30
120,000
1,840
3
40
127,500
2,300
3
18
132,500
2,234
3
30
145,000
2,311
3
19
164,000
2,377
3
7
155,000
2,736
4
10
168,000...
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number of bedrooms, and age of houses that have sold in a
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2) The following data gives the selling price, square footage, number of bedrooms, and the age...
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number of bedrooms, and the age of a house in years. These houses
have been sold in a specific neighborhood over the last six
months.
Selling Price ($)
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
individually. Which of these is best?
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Age (Years)
84000
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2
30
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1339
2
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2234
3
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