Question

You are studying the market value of homes in Katy. You collect data from the recent sale of 30 single-family homes. The dataset includes the fair market value (in $ thousands), land area of the property (in acres), and age (in years) of the 30 homes. Develop a multilinear regression model to predict the fair market value based on land area of the property (in acres) and age, (in years).

1. State the multiple regression equation.
2. Interpret the meaning of the slopes, b₁ and b₂ , in this problem?
3. Explain why the regression coefficient, b₀, has no practical meaning in the context of this problem.
4. Predict the mean fair market value for a house that has a land area of 0.25 acre and is 55 years old?
5. Construct a 95% prediction interval estimate for the fair market value for an individual house that has a land area of 0.25 acre and is 55 years old.

ADDRESS	FAIR MKT Value	Property Size	AGE
9 Sycamore Road	522.9	0.2297	56
21 Jefferson St	425.0	0.2192	61
38 Hitching Post Lane	539.2	0.1630	39
4 Poppy Lane	628.2	0.4608	28
5 Daniel Drive	490.4	0.2549	56
15 Francis Terrace	487.7	0.2290	98
23 Guilfoy Street	370.3	0.1808	58
17 Carlyle Drive	777.9	0.5015	17
8 Craft Avenue	347.1	0.2229	62
22 Beechwood Ct.	756.8	0.1300	25
14 Fox Street	389.0	0.1763	64
1 Raynham Road	889.0	1.3100	62
2 Jerome Drive	452.2	0.2520	56
7 Valentine Street	412.4	0.1148	22
38 Jefferson Street	338.3	0.1693	74
15 Inwood Road	334.3	0.1714	62
29 Meadowfield Lane	437.4	0.3849	54
13 Westland Drive	644.0	0.6545	56
79 Valentine Street	387.8	0.1722	62
13 Fairmont Place	399.8	0.1435	88
1 Prestwick Terrace	356.4	0.2755	81
11 Clement Street	346.9	0.1148	107
7 Woodland Road	541.8	0.3636	55
36 Elm Avenue	388.0	0.1474	51
17 Duke Place	564.0	0.2281	50
12 Prospect Avenue	454.4	0.4626	92
1 Buckeye Road	417.3	0.1889	64
30 Ann Street	318.8	0.1228	54
26 Broadfield Place	519.8	0.1492	44
16 Jackson Street	310.2	0.0852	104

Answer 1