Question

In computing a regression between the size of a house (in square feet) and the price (in dollars), we have r2 = 0.595. The standard deviation of the sizes is 155 square feet and the standard deviation of the prices is $3850. If the predictor increases by 1 square foot, the response will attain.

Answer 1

Answer: $19.16

Explanation:

Given the following :

r² = 0.595

Standard ard deviation of sizes = 155 square feet

Standard deviation of prices = $3850

The predictor = size increases by one square foot, change in price which is the response can be obtained from the slope :

To obtain slope :

r × (standard deviation of response / standard deviation of predictor)

r = √r²

r = √0.595

r = 0.7713624

Hence,

Slope = 0.7713624 × (3850 / 155)

= 0.7713624 × 24.838709

= 19.15964618

= $19.16