PROBLEM 5 – HOUSING PRICES

Situation:

Real Estate One conducted a recent survey of house prices for properties located on the shores of Tawas Bay. Data on 26 recent sales, including the number of bathroom, square feet and bedrooms are below.

Action:

Use the data above and multiple regression to produce a model to predict the average sale price from other variables. Comment on the following:

a. Regression equation

b. R, R2 and 1-R2, adjusted R2

c. Standard error of estimate

d. Report the t's for each value and the corresponding p-values

e. Overall test of hypothesis and decision

f. Use a .05 level of significance. Cite which variables are significant and which are not significant, based on the t values and p values for each independent variable.