Submitted by: Submitted by jrgrunigen
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Category: Business and Industry
Date Submitted: 09/16/2010 02:15 PM
Regression Analysis
Regression Analysis
Team A has decided to perform a linear regression analysis, an equation that expresses the linear relationship between two variables, to determine if home prices are based on distance. The calculations and tests are based on the real estate data table provided by. The overall opinion of the group is that the distance to the city center determines the price of the home.
h₀: Distance determines price
h₁: Distance does not determine price
For any regression analysis there must be two variables, a dependent (price) and an independent (distance). In order to measure the strength and direction of correlation, one would use a regression equation. According to the least squares principle, the equation for this is Y’ = a + bX. Where Y’ is the predicted Y value, a is the y-intercept, and b is the slope of the line. Team A will be using the data in figure A for their research:
Price Distance Price Distance Price Distance
224 6 147.4 12 263.1 17
270.8 7 217.8 12 224.8 17
312.1 7 220.9 12 228.4 17
246 7 266.6 13 176.3 17
243.7 7 312.1 13 236.8 17
209 8 154.3 13 221.1 18
252.3 8 209.7 13 246.1 18
269.2 8 294 13 190.9 18
294.3 8 240 13 125 18
188.1 8 292.4 14 199 18
227.1 8 192.9 14 221.5 18
179 8 233 14 182.4 19
271.8 9 182.7 14 234 19
345.3 9 192.6 14 216 19
257.2 9 263.2 14 199.8 19
206 9 173.6 14 198.3 19
222.1 9 188.3 14 166.5 19
244.6 9 327.2 15 209.7 19
310.8 9 209.3 15 164.1 19
173.6 9 216.8 15 209.3 20
198.9 10 176 15 205.1 20
177.1 10 254.3 15 236.4 20
207.5 10 294.5 15 188.3 20
179 10 188.3 15 227.1 20
194.4 11 213.6 16 207.5 21
326.3 11 281.3 16 173.1 21
180.4 11 172.7 16 307.8 21
207.1 11 247.7 16 289.8 21
269.9 11 166.2 16 186.7 21
175 11 273.2 16 172.4 23
293.7 11 232.2 16 175.6 24
188.3 11 171.6 16 189.4 24
242.1 12 192.2 16 187 26
245.4 12 253.2 16 139.9 28
251.4 12 155.4 16 125.9 28
In order to interpret the data two variables must be identified (1) coefficient of...