Homework
Purpose
This homework provides an opportunity to develop, evaluate, and apply bivariate and multivariate linear regression models.
Instructions:
The Excel file for this homework contains a database with information about the tax assessment value assigned to medical office buildings in a city. The following is a list of the variables in the database:
1. FloorArea: square feet of floor space
2. Offices: number of offices in the building
3. Entrances: number of customer entrances
4. Age: age of the building (years)
5. AssessedValue: tax assessment value (thousands of dollars)
Use the data to construct a model that predicts the tax assessment value assigned to medical office buildings with specific characteristics.
1. Construct a scatter plot in Excel with FloorArea as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
2. Use Excel's Analysis ToolPak to conduct a regression analysis of FloorArea and AssessmentValue. Is FloorArea a significant predictor of AssessmentValue?
3. Construct a scatter plot in Excel with Age as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
4. Use Excel's Analysis ToolPak to conduct a regression analysis of Age and Assessment Value. Is Age a significant predictor of AssessmentValue?
Construct a multiple regression model.
1. Use Excel's Analysis ToolPak to conduct a regression analysis with AssessmentValue as the dependent variable and FloorArea, Offices, Entrances, and Age as independent variables. What is the overall fit r^2? What is the adjusted r^2?
2. Which predictors are considered significant if we work with α=0.05? Which predictors can be eliminated?
3. What is the final model if we only use FloorArea and Offices as predictors?
4. Suppose our final model is:
5. AssessedValue = 115.9 + 0.26 x FloorArea + 78.34 x Offices
6. What wouldbe the assessed value of a medical office building with a floor area of 3500 sq. ft., 2 offices, that was built 15 years ago? Is this assessed value consistent with what appears in the database?
Write a 525-word report that includes the following sections:
Section I
1. Describe in detail if you observe a linear relationship between the 2 variables -FloorArea and AssessmentValue. Explain the significance of a linear relationship. Explain if FloorArea is a significant predictor of AssessmentValue and its significance. What is the Coefficient of Determination r^2 and its significance?
2. Describe in detail if you observe a linear relationship between the 2 variables - Age and AssessmentValue. Explain the significance of a linear relationship. Explain if Age is a significant predictor of AssessmentValue and its significance. What is the Coefficient of Determination r^2 and its significance?
Section II
1. Explain in detail your analysis of the AssessmentValue as the dependent variable and FloorArea, Offices, Entrances, and Age as independent variables. What is the overall fit r^2 and its significance? What is the adjusted r^2?
2. Which predictors are considered significant if we work with α=0.05? Which predictors can be eliminated?
3. What is the final model if we only use FloorArea and Offices as predictors?
Suppose our final model is:
AssessmentValue = 115.9 + 0.26 x FloorArea + 78.34 x Offices
(this is just an example...not your final model)
4. Describe in detail the assessed value of a medical office building with a floor area of 3500 sq. ft.,2 offices, that was built 15 years ago. Is this assessed value consistent with what appears in the database? Explain why or why not?
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.