1. Suppose that you estimate a model of house prices to determine the impact of having beach frontage on the value of a house. 14 You do some research, and you decide to use the size of the lot instead of the size of the house for a number of theoretical and data availability rea- sons. Your results (standard errors in parentheses) are: PRICE₁ = 40 + 35.0 LOT-2.0 AGE + 10.0 BED; - 4.0 FIRE¡ (5.0) (1.0) N = 30 (10.0) (4.0) R² = .63 (10) PRICE₁ =the price of the th house (in thousands of dollars) where: LOTi AGE BED FIRE =the size of the lot of the th house (in thousands of square feet) = the age of the th house in years =the number of bedrooms in the th house =a qualitative/dummy variable for a fireplace (1 yes for the th house) a. You expect the variables LOT and BED to have positive coefficients. Create and test the appropriate hypotheses to evaluate these expectations at the 5-percent level. b. You expect AGE to have a negative coefficient. Create and test the appropriate hypotheses to evaluate these expectations at the 10-percent level. c. At first you expect FIRE to have a positive coefficient, but one of your friends says that fireplaces are messy and are a pain to keep clean, so you're not sure. Run a two-sided t-test around zero to test these
1. Suppose that you estimate a model of house prices to determine the impact of having beach frontage on the value of a house. 14 You do some research, and you decide to use the size of the lot instead of the size of the house for a number of theoretical and data availability rea- sons. Your results (standard errors in parentheses) are: PRICE₁ = 40 + 35.0 LOT-2.0 AGE + 10.0 BED; - 4.0 FIRE¡ (5.0) (1.0) N = 30 (10.0) (4.0) R² = .63 (10) PRICE₁ =the price of the th house (in thousands of dollars) where: LOTi AGE BED FIRE =the size of the lot of the th house (in thousands of square feet) = the age of the th house in years =the number of bedrooms in the th house =a qualitative/dummy variable for a fireplace (1 yes for the th house) a. You expect the variables LOT and BED to have positive coefficients. Create and test the appropriate hypotheses to evaluate these expectations at the 5-percent level. b. You expect AGE to have a negative coefficient. Create and test the appropriate hypotheses to evaluate these expectations at the 10-percent level. c. At first you expect FIRE to have a positive coefficient, but one of your friends says that fireplaces are messy and are a pain to keep clean, so you're not sure. Run a two-sided t-test around zero to test these
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Transcribed Image Text:1. Suppose that you estimate a model of house prices to determine the impact
of having beach frontage on the value of a house.14 You do some research,
and you decide to use the size of the lot instead of the size of the house for a
number of theoretical and data availability rea- sons. Your results (standard
errors in parentheses) are:
PRICE; = 40 + 35.0 LOT¡ – 2.0 AGE; + 10.0 BED; – 4.0 FIRE;
(1.0)
(5.0)
(10.0)
(4.0)
(10)
N = 30
R2 =.63
where:
PRICE¡ =the price of the th house (in thousands of
dollars)
=the size of the lot of the th house (in thousands of
square feet)
= the age of the th house in years
=the number of bedrooms in the th house
=a qualitative/dummy variable for a fireplace (1 =
yes for the th house)
LOT;
AGE;
BED;
FIRE;
a. You expect the variables LOT and BED to have positive coefficients. Create
and test the appropriate hypotheses to evaluate these expectations at
the 5-percent level.
b. You expect AGE to have a negative coefficient. Create and test the
appropriate hypotheses to evaluate these expectations at the 10-percent
level.
c. At first you expect FIRE to have a positive coefficient, but one of your
friends says that fireplaces are messy and are a pain to keep clean, so
you're not sure. Run a two-sided ttest around zero to test these
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 24 images
Recommended textbooks for you
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman