Answer Happy

6. You have a sample of 80 communities in the London area and you estimate the below model relating house prices to various characteristics: PRICE = A + ANOX + A DISTANCE + BROOMS,+B.STRATIO + where: • PRICE are house prices (in pounds, £) • NOX is the amount of nitrogen oxide in the air (parts per million) • DISTANCE is the distance of the community from the nearest employment centre (miles) • ROOMS is the average number of rooms in houses in the area • STRATIO is the average student-teacher ratio of schools in the area. 1 The OLS estimates are given in the table below. constant NOX DISTANCE ROOMS STRATIO OLS Dependent variable: PRICE Coefficient Standard Error 23716.20 5120.56 -3044.90 353.60 -965.40 191.40 6808.70 401 30 - 1269.17 127.30 Mean dependent var R-squared Schwarz criterion 22511 0.58 10214 S.D. dependent var Adjusted R-squared Akake cnterion 9208 0.50 10193 (a) is the variable NOx statistically significant? Use the 5% significance level (b) is the variable ROOMS statistically significant? Use the 5% significance level 5 marks S marks (c) Interpret R 5 marka (d) What happens to housing prioes the amount of bogen oxide in the air increases by parts per million? Tout the overal grificance of the multipliersion. Use the significance level mark Total 25 marka