MGSC2301 Individual PROJECT #2 (Multiple Regression) | Complete Solution

MGSC2301   Individual PROJECT #2 (Multiple Regression)  Spring, 2016

General Instructions/Information:

•    Individual Project #2 is due on Thursday, April 14.

•    Individual Project #2 will be scored on a 50-point scale.

A real estate association in a suburban community would like to study the relationship between the size of a single-family house (as measured by the number of rooms) and the selling price of the house (in thousands of dollars). Two different neighborhoods are included in the study, one on the east side of the community (=0) and the other on the west side (=1). A random sample of 20 houses was selected with the results given below:

Price    Rooms    Neighborhood
109.6    7    east
107.4    8    east
140.3    9    east
146.5    12    east
98.2    6    east
137.8    9    east
124.1    10    east
113.2    8    east
127.8    9    east
125.3    8    east
108.5    6    west
181.3    13    west
137.4    10    west
146.2    10    west
142.4    9    west
123.7    8    west
129.6    8    west
143.6    9    west
160.7    11    west
148.3    9    west

1.  State the multiple regression equation. Before you run the regression model create a dummy variable (Input the data into SPSS and then go to Transform Recode into Different Variables. (9 points)

2. Predict the selling price for a house with nine rooms that is located in an east-side neighborhood, and construct a 95% confidence interval estimate and a 95% prediction interval. (9 points)

3. Perform a residual analysis on the results, and determine the adequacy of the model. (9 points)

4. Is there a significant relationship between selling price and the two independent variables (rooms and neighborhood) at the 0.05 level of significance (test of joint significance)? (5 points)

5. At  the  0.05  level  of  significance,  determine  whether  each  independent  variable  makes a contribution to the regression model (tests of individual significance). Indicate the most appropriate regression model for this set of data.
(5 points)

6a). Construct and interpret a 95% confidence interval estimate of the population slope for the relationship between selling price and rooms. (3 points)

6b). Construct and interpret a 95% confidence interval estimate of the population slope for the relationship between selling price and neighborhood. (3 points)

7a). What assumption do you need to make about the slope of selling price with number of rooms? (2 points)

7b). What assumption do you need to make about the slope of selling price with neighborhood? (2 points)

8. Interpret the meaning of the coefficient of multiple determination. (3 points)

Type your project with all results and attachments and draw conclusions.