Real Estate Prices Answer all questions in a separate Word document. Use full sentences in your answers. Include the output from your regression model in the Word document The Excel file contains the following variables: Price: home price (measured in 1000s of S)
Living Area: size of home (measured in ft) Bedrooms: number of bedrooms
Bathrooms: number of bathrooms
A real estate agent has new clients who are recently married. They are initially interested in purchasing a 1500 square foot home with 3 bedrooms and 1.5 baths. 1. Estimate the regression model below. Price = Bo + B, Living. Area + B2Bedrooms + B, Bathrooms + E The real estate agent is confused as to why the sign on bedrooms in your regression from Part 1 is negative. He says. "Homes with more bedrooms go down in price? That makes no sense." 2. Explain why it makes perfect sense for bedrooms in the model above to have a negative sign. (Hint: think about what you are controlling in the regression above.)