TABLE 14-6 One of the Most Common Questions of Prospective House Buyers

Multiple Choice

TABLE 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) the amount of insulation in inches (X₂) , the number of windows in the house (X₃) , and the age of the furnace in years (X₄) . Given below are the Excel outputs of two regression models.
Model 1

Model 2

-Referring to Table 14-6, the estimated value of the partial regression parameter β₁ in Model 1 means that

A) holding the effect of the other independent variables constant, an estimated expected $1 increase in heating costs is associated with a decrease in the daily minimum outside temperature by 4.51 degrees.
B) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in a decrease in heating costs by $4.51.
C) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by $4.51.
D) holding the effect of the other independent variables constant, a 1% increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by 4.51%.