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A Regression Equation That Predicts the Price of Homes in Thousands

Question 7

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A regression equation that predicts the price of homes in thousands of dollars is A regression equation that predicts the price of homes in thousands of dollars is = 24.6 + 0.055x<sub>1</sub> - 3.6x<sub>2</sub>,where x<sub>2</sub> is a dummy variable that represents whether the house is on a busy street or not.Here x<sub>2</sub> = 1 means the house is on a busy street and x<sub>2</sub> = 0 means it is not.From this we can conclude that on average homes that are on busy streets are worth $3600 more than homes that are not on busy streets. = 24.6 + 0.055x1 - 3.6x2,where x2 is a dummy variable that represents whether the house is on a busy street or not.Here x2 = 1 means the house is on a busy street and x2 = 0 means it is not.From this we can conclude that on average homes that are on busy streets are worth $3600 more than homes that are not on busy streets.

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