Interpretation of regression equation

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Reference no: EM1396512

Suppose the regression equation that has been used to estimate the value of existing homes is as follows;

Value = 10,000 + 50X1 + 5X2 + 10,000X3

Where;

X1 is square feet of livable area

X2 is the size of the lot measured in square feet

X3 is an indicator variable for the presence of a pool (1 if yes, 0 if no)

a. Interpret the meaning of the slopes of this equation.

b. Estimate the value of a home with 2,000 square feet of livable area, 10,000 square foot lot, and a pool.

Reference no: EM1396512

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