In Hawaii, Proceedings Are Under Way to Enable Private Citizens

Essay

In Hawaii, proceedings are under way to enable private citizens to own the property that
their homes are built on. In prior years, only estates were permitted to own land, and
homeowners leased the land from the estate. In order to comply with the new law, a large
Hawaiian estate wants to use regression analysis to estimate the fair market value of the
land. The following variables are proposed: $$\begin{array} { l } y = \text { Sale price of property (\$ thousands) } \\x _ { 2 } = 1 \text { if property near Cove, } 0 \text { if not }\end{array}$$
Write a regression model relating the sale price of a property to the qualitative variable $x$ . Interpret all the $\beta \mathrm { s }$ in the model.