Jenny Wilson is the owner and broker of a real estate company in Montgomery, Alabama. This company is known as Jenny Wilson Realty. for her real esate company, Ms. Wilson wants to develop a regression model to explain the selling price (SP) for a house based on the size of the house measured in terms of the square footage of the house (SF), and the age of the house (AGE). For her analysis, Ms. Wilson gathers the data shown below.
Selling Price (SP) in $ Square Footage (SF) Age
95,000 1,926 30
119,000 2,069 40
124,800 1,720 30
135,000 1,396 15
142,800 1,706 32
145,000 1,847 38
159,000 1,950 27
165,000 2,323 30
182,000 2,285 26
183,000 3,752 35
200,000 2,300 18
211,000 2,525 17
215,000 3,800 40
219, 000 1,740 12
1. In this study which is the dependent variable?
2. In this study which variables are the independent or explanatory variables?
3. Write an equation to show the relationship between the dependent and independent variables. Use symbols given for the different variables to do this.
4. What method of technique would you use in order to estimate the unknown coefficients (or parameters) in the equation specified for question 3 above?