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House Appraised Value Selling Price Square Feet Bedrooms Bathrooms

1 119,370 121,870 2050 4 5


2 148,930 150,250 2200 4 4
3 130,390 122,780 1590 3 3
4 135,700 144,350 1860 3 3
5 126,300 116,200 1210 2 3
6 137,080 139,490 1710 3 2
7 123,490 115,730 1670 3 3
8 150,830 140,590 1780 3 4
9 123,480 120,290 1520 4 4
10 132,050 147,250 1830 2 3
11 148,210 152,260 1700 3 3
12 139,530 144,800 1720 3 4
13 114,340 107,060 1670 3 4
14 140,040 147,470 1650 3 3
15 136,010 135,120 1610 2 1
16 140,930 140,240 1570 3 4
17 132,420 129,890 1650 4 5
18 118,300 121,140 1640 3 4
19 122,140 111,230 1420 2 3
20 149,820 145,140 2070 4 3
21 128,910 139,010 1610 2 3
22 134,610 129,340 1910 4 4
23 121,990 113,610 1410 2 2
24 150,500 141,050 1860 4 3
25 142,870 152,900 1990 4 3
26 155,550 157,790 2270 5 4
27 128,500 135,570 1965 4 4
28 143,360 151,990 1820 3 3
29 119,650 120,530 1650 3 3
30 122,570 118,640 1470 2 2
31 145,270 149,510 1850 4 3
32 149,730 146,860 2170 4 4
33 147,700 143,880 1930 3 3
34 117,530 118,520 1380 2 1
35 140,130 146,070 1810 3 4
36 136,570 135,350 1760 3 4
37 130,440 121,540 1530 2 3
38 118,130 132,980 1700 3 2
39 130,980 147,530 1980 4 4
40 131,330 128,490 1590 2 2
41 141,100 141,930 1740 3 2
42 117,870 123,550 1730 3 2
43 160,580 162,030 2100 5 6
44 151,100 157,390 2040 4 4
45 120,150 114,550 1730 2 1
46 133,170 139,540 1680 2 2
47 140,160 149,920 2050 4 4
48 124,560 122,080 1750 3 3
49 127,970 136,510 1870 4 3
50 101,930 109,410 1330 2 3
51 131,470 127,290 1700 3 3
52 121,270 120,450 1460 2 3
53 143,550 151,960 1910 3 3
54 136,890 132,540 1610 2 1
55 106,110 114,330 1470 2 1
56 137,540 141,320 1810 3 4
57 134,330 83,760 1650 2 2
58 127,590 118,200 1520 2 1
59 137,440 140,200 1920 4 5
60 114,090 113,550 1410 2 1
61 145,460 156,520 2030 3 3
62 141,900 137,350 1950 3 4
63 116,340 110,610 1340 2 1
64 149,200 153,690 1850 3 4
65 141,810 153,330 1780 3 2
66 116,440 111,950 1440 2 1
67 137,740 143,460 2040 4 4
68 144,700 142,130 2160 5 4
69 149,660 155,460 2170 4 3
70 118,170 135,440 1710 2 3
71 137,660 127,300 1640 3 2
72 119,700 113,770 1380 2 1
73 143,120 141,110 2100 5 6
74 129,910 130,080 1610 2 2
75 141,780 139,350 1950 4 4
76 159,190 160,030 2080 5 4
77 156,130 152,840 1960 3 2
78 126,720 122,270 1920 4 4
79 133,220 145,880 1920 4 3
80 118,090 115,470 1490 2 1
81 141,630 135,720 1600 2 1
82 138,560 136,160 1650 3 2
83 134,100 144,920 1890 4 5
84 132,240 131,290 1620 3 4
85 145,820 138,530 1820 3 4
86 127,150 124,050 1750 3 2
87 105,070 107,900 1460 2 1
88 127,200 123,450 1530 3 2
89 111,560 111,700 1540 2 3
90 150,410 145,140 1950 3 2
91 129,150 120,440 1480 3 2
92 130,310 136,870 2050 4 4
93 129,230 140,300 1660 3 2
94 105,060 113,780 1540 2 3
95 134,210 141,230 1720 3 4
96 109,250 104,830 1400 2 1
97 127,350 118,790 1578 3 4
98 104,010 112,040 1700 3 3
99 133,940 137,270 1880 4 5
100 141,130 145,710 1850 3 4
101 136,530 138,380 1430 2 3
102 118,040 109,460 1390 2 1
103 153,700 144,680 2130 4 5
104 126,310 133,270 1890 4 4
105 134,020 133,270 1640 2 3
106 141,560 150,380 2070 3 3
107 142,960 135,260 1810 3 2
108 118,530 112,600 1460 2 1
109 121,590 114,230 1410 2 2
110 146,400 153,240 2190 4 3
111 141,250 125,890 1580 3 4
112 130,730 135,620 1840 3 3
113 132,650 138,820 1930 3 3
114 125,570 129,430 1930 4 5
115 125,740 136,450 1820 3 4
116 120,220 126,740 1480 2 1
117 128,290 130,090 1600 2 1
118 136,890 132,680 1880 3 2
119 142,430 142,890 1780 3 2
120 119,310 127,040 1920 3 2
121 120,370 131,450 1830 4 3
122 118,830 114,570 1470 2 3
123 124,490 129,560 1690 3 4
124 140,570 149,550 1930 4 5
125 133,620 140,820 1970 2 3
126 105,050 111,550 1530 2 2
127 147,090 142,760 2030 5 6
128 115,430 124,250 1830 3 3
129 125,370 132,320 2070 3 4
130 115,970 121,450 1630 2 3
131 125,210 132,450 1580 3 2
132 130,370 135,830 1760 3 4
133 119,750 125,760 1810 4 5
134 120,930 125,840 1710 3 2
135 126,800 135,320 1890 3 3
136 118,820 120,140 1640 2 1
137 144,080 147,530 2010 4 4
138 142,490 144,940 1730 3 3
139 140,550 136,010 1770 4 3
140 130,360 119,330 1750 4 5
141 124,270 131,150 1660 3 3
142 167,730 172,360 2510 5 6
143 129,190 137,170 1700 2 3
144 125,180 124,710 1660 3 4
145 157,510 148,650 2110 4 5
146 126,670 128,520 1430 2 2
147 137,570 132,020 1710 4 5
148 133,460 128,030 1580 2 1
1. Explore the relationship between the selling prices (Y) and the appra
values (X) of the 148 homes in the file P02_11.xlsx by estimating a sim
linear regression model. Interpret the standard error of
estimate se and R2 and the least squares line for these data.
a. Is there evidence of a linear relationship between the selling price a
appraised value? If so, characterize the relationship. Is it positive or
negative? Is it weak or strong?
b. For which of the three remaining variables, the size of the home, the
number of bedrooms, and the number of bathrooms, is the relationshi
with the home's selling price stronger? Justify your choice with additio
simple linear regression models.
rices (Y) and the appraised
sx by estimating a simple
rror of
hese data.
een the selling price and
hip. Is it positive or

e size of the home, the


oms, is the relationship
ur choice with additional
StatTools (Core Analysis Pack)
Analysis: Scatterplot
Performed By: Chris Albright
Date: Saturday, June 05, 2010
Updating: Live

Scatterplot of Selling Price vs Appraised Value of Data Set #1


200000

180000

160000

140000
Selling Price / Data Set #1

120000

100000

80000

60000
All four
All four of
of these
these show
show aa p
relationship, but
relationship, but the
the first
first
40000 See the
See the next
next sheet
sheet for
for th
th
20000

0
90000 100000 110000 120000 130000 140000 150000 160000 170000 180000
Appraised Value / Data Set #1

Correlation #NAME?

Scatterplot of Selling Price vs Square Feet of Data Set #1


200000

180000

160000

140000
Selling Price / Data Set #1

120000

100000

80000

60000

40000

20000

0
1000 1200 1400 1600 1800 2000 2200 2400 2600
Square Feet / Data Set #1

Correlation #NAME?

Scatterplot of Selling Price vs Bedrooms of Data Set #1


200000

180000

160000

140000
Set #1

120000
Scatterplot of Selling Price vs Bedrooms of Data Set #1
200000

180000

160000

140000
Selling Price / Data Set #1

120000

100000

80000

60000

40000

20000

0
1.5 2 2.5 3 3.5 4 4.5 5 5.5
Bedrooms / Data Set #1

Correlation #NAME?

Scatterplot of Selling Price vs Bathrooms of Data Set #1


200000

180000

160000

140000
Selling Price / Data Set #1

120000

100000

80000

60000

40000

20000

0
0 1 2 3 4 5 6 7
Bathrooms / Data Set #1

Correlation #NAME?
All four
All four of
of these
these show
show aa positive
positive
relationship, but
relationship, but the
the first
first isis the
the strongest.
strongest.
See the
See the next
next sheet
sheet for
for the
the regressions.
regressions.
StatTools (Core Analysis Pack)
Analysis: Regression
Performed By: Chris Albright
Date: Saturday, June 05, 2010
Updating: Static

Multiple Adjusted StErr of


R-Square
Summary R R-Square Estimate
0.8334 0.6946 0.6925 7970.7929833

Degrees of Sum of Mean of


F-Ratio p-Value
ANOVA Table Freedom Squares Squares
Explained 1 21093675878 21093675878 332.0085 < 0.0001
Unexplained 146 9275896954.2 63533540.782

Standard Confidence Interval 95%


Coefficient t-Value p-Value
Regression Table Error Lower Upper
Constant 9003.602332 6834.1462178 1.3174 0.1898 -4503.0328484 22510.237512
Appraised Value 0.9383910466 0.0515002398 18.2211 < 0.0001 0.8366087715 1.0401733217

Multiple Adjusted StErr of


R-Square
Summary R R-Square Estimate
0.7495 0.5618 0.5587 9547.810816

Degrees of Sum of Mean of


F-Ratio p-Value
ANOVA Table Freedom Squares Squares
Explained 1 17060111891 17060111891 187.1433 < 0.0001
Unexplained 146 13309460941 91160691.379

Standard Confidence Interval 95%


Coefficient t-Value p-Value
Regression Table Error Lower Upper
Constant 50526.843169 6076.3822463 8.3153 < 0.0001 38517.811521 62535.874817
Square Feet 46.990971989 3.4350043854 13.6800 < 0.0001 40.202215998 53.77972798

Part a:
Part a: Yes,
Yes, itit appears
appears that that there
there isis strong
strong positive
positive linear
linear relationship
relationship between
between the the selling
selling prices
prices and
and
appraised values
appraised values of of these
these homes.
homes. The The R-square
R-square value,
value, 0.69,
0.69, indicates
indicates aa fairly
fairly good
good fit.
fit. The
The estimated
estimated
least squares
least squares line line isis YY == 9003.6
9003.6 ++ 0.9384
0.9384 X,X, which
which indicates
indicates that
that the
the selling
selling price
price increases
increases by
by $938.4
$938.4 as
as
the appraised
the appraised value value increases
increases byby $1,000.
$1,000. The
The standard
standard error,
error, about
about $7971,
$7971, indicates
indicates the
the magnitude
magnitude of
of
the error
the error we're
we're like like toto make
make byby predicting
predicting selling
selling price
price from
from appraised
appraised value
value only.
only.

Part b:
Part b: Based
Based on
on the
the other
other three
three regressions,
regressions, we
wesee
see that
that the
the home's
home's selling
selling price
price isis more
more strongly
strongly
associated with
associated with the
the size
size of
of the
the home
home than
than the
the number
number of of bedrooms
bedrooms or or bathrooms.
bathrooms. This This conclusion
conclusion isis
supported by
supported by the
the higher
higher R-square
R-square and
and the
the scatterplots
scatterplots on
on the
the previous
previous sheet.
sheet.
Multiple Adjusted StErr of
R-Square
Summary R R-Square Estimate
0.5875 0.3451 0.3407 11671.261159

Degrees of Sum of Mean of


F-Ratio p-Value
ANOVA Table Freedom Squares Squares
Explained 1 10481695625 10481695625 76.9478 < 0.0001
Unexplained 146 19887877207 136218337.04

Standard Confidence Interval 95%


Coefficient t-Value p-Value
Regression Table Error Lower
Constant 103182.58459 3527.0920503 29.2543 < 0.0001 96211.831544
Bedrooms 9813.8473955 1118.7712963 8.7720 < 0.0001 7602.7686056

Multiple Adjusted StErr of


R-Square
Summary R R-Square Estimate
0.4460 0.1989 0.1934 12908.522254

Degrees of Sum of Mean of


F-Ratio p-Value
ANOVA Table Freedom Squares Squares
Explained 1 6041600600.6 6041600600.6 36.2576 < 0.0001
Unexplained 146 24327972232 166629946.79

Standard Confidence Interval 95%


Coefficient t-Value p-Value
Regression Table Error Lower
Constant 117364.00482 2798.3363347 41.9406 < 0.0001 111833.52497
Bathrooms 5127.9273027 851.61319488 6.0214 < 0.0001 3444.8452656

elling prices
elling prices and
and
fit. The
fit. The estimated
estimated
reases
eases byby $938.4
$938.4 as
as
s the
the magnitude
magnitude ofof Need to "Interpret the standard error of estimate se and R2 and the least
squares line for these data." as requested in the question.

more strongly
strongly The R-square value, 0.69, indicates a fairly good fit. The estimated least
more squares line is Y = 9003.6 + 0.9384 X, which indicates that the selling
This conclusion
This conclusion isis
price increases by $938.4 as the appraised value increases by $1,000. The
standard error, about $7971, indicates the magnitude of the error we're
like to make by predicting selling price from appraised value only.
Confidence Interval 95%
Upper
110153.33764
12024.926186

Confidence Interval 95%


Upper
122894.48468
6811.0093398