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Math Help - Stats help please

  1. #1
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    Stats help please

    the regression analysis gives the model price=47.82 +0.061(size)

    1. a real estate ageny shows a potential buyer a 1200 square foot home, saying that the asking price is 6000 less than what one would expect to pay for a house of this size. what is the asking price and what is the 6000 called?

    I am lost on this problem and your help would be greatly appreciated. thanks
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  2. #2
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    Your scales seem off.

    That is the price regression analysis, right? So if you plug in 1200 times that, it comes out to 72, which would mean the house is around 120 or something (rough estimates)

    Unless the scaling is in thousands, that would make more sense. Update with a reply and I will try and help further.
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  3. #3
    Rhymes with Orange Chris L T521's Avatar
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    Quote Originally Posted by mcdaking84 View Post
    the regression analysis gives the model price=47.82 +0.061(size)

    1. a real estate ageny shows a potential buyer a 1200 square foot home, saying that the asking price is 6000 less than what one would expect to pay for a house of this size. what is the asking price and what is the 6000 called?

    I am lost on this problem and your help would be greatly appreciated. thanks
    For the first part, substitute 1200 into your regression model: P(1200)=47.82+0.061(1200)\approx\dots (I assume that this would be in thousands of dollars? o.O)

    The difference in the asking price is $6000 less than one would expect to pay for a home of this size; this difference is known as the residual of the regression.

    --Chris
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  4. #4
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    Quote Originally Posted by Chris L T521 View Post
    For the first part, substitute 1200 into your regression model: P(1200)=47.82+0.061(1200)\approx\dots (I assume that this would be in thousands of dollars? o.O)

    The difference in the asking price is $6000 less than one would expect to pay for a home of this size; this difference is known as the residual of the regression.

    --Chris
    This is exactly what I was thinking. You're over thinking it.

    If the scaling is in thousands, then you just need plug in 1200, and then you get 120 something thousands of dollars.

    You would simply then subtract 6000 from the calculated number to find the answer
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  5. #5
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    thanks guys. I thought I was doing something wrong because the answer was so small

    thanks
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