2. The following regression model was estimated to explain housing values in a city that consists of four geographic reg

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2 The Following Regression Model Was Estimated To Explain Housing Values In A City That Consists Of Four Geographic Reg 1 (36.55 KiB) Viewed 84 times

2. The following regression model was estimated to explain housing values in a city that consists of four geographic regions (north, east, south, and west). The estimated equation, based on 40 observations, is Y = 20000-200 (age of house) + 2000 (number of rooms) - 500 (miles from city hall) + 4000 Xã -- 1000 X + 2000 X6 where Xe = 1 if house is in the eastern part of the city: 0 otherwise. Xs = 1 if house is in the western part of the city: 0 otherwise. Xo = 1 if house is in the northern part of the city: 0 otherwise. a. Estimate the value (in dollars) of a 7 room, 5-year-old house that is in the eastern part of town and is 4 miles from city hall. b. Rank the four sections (east, west, north, south) of town terms of desirability with 1 identifying the most desirable, 4 identifying the least desirable. 2. C What is the appropriate CRITICAL value to test the explanatory power to the model? Use alpha=0.05.