Using the data in HPRICE2, the following equation was estimated log(price): = 11.71 1.043 log(nox), n = 506, R² = 0.264

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Using The Data In Hprice2 The Following Equation Was Estimated Log Price 11 71 1 043 Log Nox N 506 R 0 264 1 (91.27 KiB) Viewed 20 times

Using the data in HPRICE2, the following equation was estimated log(price): = 11.71 1.043 log(nox), n = 506, R² = 0.264 where the observations are communities so price is the median housing price in the community and nox is the level of pollution in the community. (i) Interpret the coefficient on log(nox). Is the sign of this estimate what you expected it to be? (ii) Do you think that this regression would provide an unbiased estimator of the coefficient on log(nox)? Why? Hint: Think about where pollution would be concentrated if the city could decide where to concentrate pollution generating activities. (iii) How much of the variation in log(price) is explained by the variation in log(nox)? Does this tell us that these variables are not related or that there is no causal effect of pollution on median house prices?