Suppose you have the following regression results from a regression of home prices on house attributes for a random sample of house transactions: $$\begin{array} { | l | r | r | }
\hline & \text { Coefficierts } & \text { Stardard Error } \
\hline \text { Iratercept } & 16310.0 & 4114.5 \
\hline \text { Nurrber of Bedroorrs } & 7295.3 & 1399 . \
\hline \text { Number of Bathroorrs } & 23473.0 & 4032.0 \
\hline
\end{array}$$ r-squared = 0.302 Adjusted r-squared = 0.299 If we assume that the proper model to predict the market value of houses is given by this regression, and thus we are getting unbiased estimates of the true relationships between number of bedrooms/bathrooms and sales price, what is the effect on sales price of increasing the number of bathrooms in a house by one, holding number of bedrooms fixed?
A) Approximately, $16,310 dollars.
B) Approximately, $ 7,295 + 23,473 = $30,768.
C) Approximately, $23,473.
D) Approximately, an increase of 30%.

Question

Suppose you have the following regression results from a regression of home prices on house attributes for a random sample of house transactions: $$\begin{array} { | l | r | r | } 
\hline & \text { Coefficierts } & \text { Stardard Error } \
\hline \text { Iratercept } & 16310.0 & 4114.5 \
\hline \text { Nurrber of Bedroorrs } & 7295.3 & 1399 . \
\hline \text { Number of Bathroorrs } & 23473.0 & 4032.0 \
\hline
\end{array}$$ r-squared = 0.302 Adjusted r-squared = 0.299 If we assume that the proper model to predict the market value of houses is given by this regression, and thus we are getting unbiased estimates of the true relationships between number of bedrooms/bathrooms and sales price, what is the effect on sales price of increasing the number of bathrooms in a house by one, holding number of bedrooms fixed?
A) Approximately, $16,310 dollars.
B) Approximately, $ 7,295 + 23,473 = $30,768.
C) Approximately, $23,473.
D) Approximately, an increase of 30%.

Quizplus · Accepted Answer

From the regression results, we see that the coefficient for number of bathrooms is 23,473. This means that on average, holding all other factors constant, each additional bathroom is associated with a $23,473 increase in the sales price of the house.

Suppose You Have the Following Regression Results from a Regression