Question

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	2,500	3	1
172,500	2,500	4	3
174,000	2,479	3	3
175,000	2,400	3	1
177,500	3,124	4	0
184,000	2,500	3	2
195,500	4,062	4	10
195,000	2,854	3	3

2.) Solve this question by hand:

Develop a regression model to predict selling price based on the square footage. Find the value of beta(regression coefficient), coefficient of determination. Test for the significance of the model at 5% level. You must report the test statistic, it's corresponding significance value and the critical value that corresponds to 5%. (You can find a table of the relevant distribution by a google search)

Answer 1

Observation Table:

SELLING PRICE (Y)	SQUARE FOOTAGE(X)	y^2	X^2	XY
84,000	1,670	7056000000	2788900	140280000
79,000	1,339	6241000000	1792921	105781000
91,500	1,712	8372250000	2930944	156648000
120,000	1,840	14400000000	3385600	220800000
127,500	2,300	16256250000	5290000	293250000
132,500	2,234	17556250000	4990756	296005000
145,000	2,311	21025000000	5340721	335095000
164,000	2,377	26896000000	5650129	389828000
155,000	2,736	24025000000	7485696	424080000
168,000	2,500	28224000000	6250000	420000000
172,500	2,500	29756250000	6250000	431250000
174,000	2,479	30276000000	6145441	431346000
175,000	2,400	30625000000	5760000	420000000
177,500	3,124	31506250000	9759376	554510000
184,000	2,500	33856000000	6250000	460000000
195,500	4,062	38220250000	16499844	794121000
195,000	2,854	38025000000	8145316	556530000
2,540,000	40,938	4.02317E+11	104715644	6429524000