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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
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Phoniex University
Oct-2001 - Nov-2016
5.28 ● The following data on sale price, size, and land-to- building ratio for 10 large industrial properties appeared in the paper “Using Multiple Regression Analysis in Real Estate Appraisal” (Appraisal Journal [2002]: 424–430):
|
|
Sale Price |
Size |
Land-to- |
|
(millions |
(thousands |
Building |
|
|
Property |
of dollars) |
of sq. ft.) |
Ratio |
1 10.6 2166 2.0
2 2.6 751 3.5
3 30.5 2422 3.6
4 1.8 224 4.7
5 20.0 3917 1.7
6 8.0 2866 2.3
7 10.0 1698 3.1
8 6.7 1046 4.8
9 5.8 1108 7.6
10 4.5 405 17.2
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a. Calculate and interpret the value of the correlation coefficient between sale price and size.
b. Calculate and interpret the value of the correlation co- efficient between sale price and land-to-building ratio.
c. If you wanted to predict sale price and you could use either size or land-to-building ratio as the basis for making predictions, which would you use? Explain.
d. Based on your choice in Part (c), find the equation of the least-squares regression line you would use for pre- dicting y = sale price.
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