Question 10.31

10.31 Size and selling price of houses.

Table 10.5 describes a random sample of 30 houses sold in a Midwest city during a recent year.14 We examine the relationship between size and price.

hsize

  1. Plot the selling price versus the number of square feet. Describe the pattern. Does suggest that size is quite helpful for predicting selling price?
  2. Do a linear regression analysis. Give the least-squares line and the results of the significance test for the slope. What does your test tell you about the relationship between size and selling price?

10.31

(a) The relationship is linear, positive, and moderate strength. . 43.06% of the variation in house price can be attributed to house size. House size is fairly useful in determining house price.
(b) . There is a significant linear relationship between price and size. For each additional square foot, house price increases by $76.59.