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The file br2.dat contains data on 1080 houses sold in Baton Rouge, Louisiana during mid-2005. The data include sale price and the house size in square feet. Also included is an indicator variable TRADITIONAL indicating whether the house style is traditional or not. B1+ B2SQFT + e. Test the null hypothesis that the slope (a) For the traditional-style houses estimate the linear regression model PRICE = is zero against the alternative that it is positive, using the a = 0.01 level of significance. Hint: check how to assess a subset of the data in the code cell below. (b) Using the linear model in (a), test the null hypothesis (Ho) that the expected price of a house of 2000 square feet is equal to, or less than, $120,000. What is the appropriate alternative hypothesis? Use the a = €0.01 level of significance. Obtain the p-value of the test. What is your conclusion? (c) Based on the estimated results from part (a), construct a 95% interval estimate of the expected price of a house of 2000 square feet. = (d) For the traditional-style houses, estimate the quadratic regression model PRICE α1+α2SQFT² + e. Test the null hypothesis that the marginal effect of an additional square foot of living area in a home with 2000 square feet of living space is $75 against the alternative that the effect is less than $75. Use the a = 0.01 level of significance. Repeat the same test for a home of 4000 square feet of living space. Discuss your conclusions. 1.8.0.1. Solution (a) (b) (c) (d)

The file br2.dat contains data on 1080 houses sold in Baton Rouge, Louisiana during mid-2005. The data include sale price and the house size in square feet. Also included is an indicator variable TRADITIONAL indicating whether the house style is traditional or not. B1+ B2SQFT + e. Test the null hypothesis that the slope (a) For the traditional-style houses estimate the linear regression model PRICE = is zero against the alternative that it is positive, using the a = 0.01 level of significance. Hint: check how to assess a subset of the data in the code cell below. (b) Using the linear model in (a), test the null hypothesis (Ho) that the expected price of a house of 2000 square feet is equal to, or less than, $120,000. What is the appropriate alternative hypothesis? Use the a = €0.01 level of significance. Obtain the p-value of the test. What is your conclusion? (c) Based on the estimated results from part (a), construct a 95% interval estimate of the expected price of a house of 2000 square feet. = (d) For the traditional-style houses, estimate the quadratic regression model PRICE α1+α2SQFT² + e. Test the null hypothesis that the marginal effect of an additional square foot of living area in a home with 2000 square feet of living space is $75 against the alternative that the effect is less than $75. Use the a = 0.01 level of significance. Repeat the same test for a home of 4000 square feet of living space. Discuss your conclusions. 1.8.0.1. Solution (a) (b) (c) (d)

Algebra and Trigonometry (MindTap Course List)
Algebra and Trigonometry (MindTap Course List)
4th Edition
ISBN:9781305071742
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter1: Equations And Graphs
Section1.FOM: Focus On Modeling: Fitting Lines To Data
Problem 10P
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The file br2.dat contains data on 1080 houses sold in Baton Rouge, Louisiana during mid-2005. The data include sale price and the house size in square feet. Also included is an indicator variable TRADITIONAL indicating whether the house style is traditional or not. B1+ B2SQFT + e. Test the null hypothesis that the slope (a) For the traditional-style houses estimate the linear regression model PRICE = is zero against the alternative that it is positive, using the a = 0.01 level of significance. Hint: check how to assess a subset of the data in the code cell below. (b) Using the linear model in (a), test the null hypothesis (Ho) that the expected price of a house of 2000 square feet is equal to, or less than, $120,000. What is the appropriate alternative hypothesis? Use the a = €0.01 level of significance. Obtain the p-value of the test. What is your conclusion? (c) Based on the estimated results from part (a), construct a 95% interval estimate of the expected price of a house of 2000 square feet. = (d) For the traditional-style houses, estimate the quadratic regression model PRICE α1+α2SQFT² + e. Test the null hypothesis that the marginal effect of an additional square foot of living area in a home with 2000 square feet of living space is $75 against the alternative that the effect is less than $75. Use the a = 0.01 level of significance. Repeat the same test for a home of 4000 square feet of living space. Discuss your conclusions. 1.8.0.1. Solution (a) (b) (c) (d)
Transcribed Image Text:The file br2.dat contains data on 1080 houses sold in Baton Rouge, Louisiana during mid-2005. The data include sale price and the house size in square feet. Also included is an indicator variable TRADITIONAL indicating whether the house style is traditional or not. B1+ B2SQFT + e. Test the null hypothesis that the slope (a) For the traditional-style houses estimate the linear regression model PRICE = is zero against the alternative that it is positive, using the a = 0.01 level of significance. Hint: check how to assess a subset of the data in the code cell below. (b) Using the linear model in (a), test the null hypothesis (Ho) that the expected price of a house of 2000 square feet is equal to, or less than, $120,000. What is the appropriate alternative hypothesis? Use the a = €0.01 level of significance. Obtain the p-value of the test. What is your conclusion? (c) Based on the estimated results from part (a), construct a 95% interval estimate of the expected price of a house of 2000 square feet. = (d) For the traditional-style houses, estimate the quadratic regression model PRICE α1+α2SQFT² + e. Test the null hypothesis that the marginal effect of an additional square foot of living area in a home with 2000 square feet of living space is $75 against the alternative that the effect is less than $75. Use the a = 0.01 level of significance. Repeat the same test for a home of 4000 square feet of living space. Discuss your conclusions. 1.8.0.1. Solution (a) (b) (c) (d)
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