A real estate analyst believes that the three main factors that influence an apartment's rent in a college town are the number of bedrooms,the number of bathrooms,and the apartment's square footage.For 40 apartments,she collects data on the rent (y,in $),the number of bedrooms (x₁),the number of bathrooms (x₂),and its square footage (x₃).She estimates the following model: Rent = β₀ + β₁ Bedroom + β₂ Bath + β₃Sqft + ε.The following table shows a portion of the regression results. Which of the following are the hypotheses to test if the explanatory variables Bath and Sqft are jointly significant in explaining Rent? A) H₀:β₂ = β₃= 0;H_A: both of the coefficients are nonzero. B) H₀:β₂ = β₃= 0;H_A: at least one of the coefficients is zero. C) H₀:β₂ = β₃= 0;H_A: at least one of the coefficients is nonzero. D) H₀:β₂ = β₃= 0;H_A: both of the coefficients are zero.

Question

Quizplus · Accepted Answer

To test if the explanatory variables Bath and Sqft are jointly significant in explaining Rent, we need to perform an F-test with the null hypothesis that both coefficients are equal to zero and the alternative hypothesis that at least one coefficient is not equal to zero. Therefore, the correct answer is C, which lists the null hypothesis as H₀:β₂ = β₃=0 and the alternative hypothesis as H_A: at least one of the coefficients is nonzero.

A Real Estate Analyst Believes That the Three Main Factors