Statistics Essay Example | Topics and Well Written Essays - 750 words - 3

Statistics - Essay Example Additionally, the regression model created in this paper is used to discuss the variation in house prices depending on presence, absence or variation in the predicting factors. Thus, house prices are considered to be the dependent variables whereas the number of bathrooms, number of bedrooms and size in square feet are deemed to be the independent or predictor variables. Factors that determine house prices have an economic significance. For instance, a home or a house that has three bedrooms and three bathrooms is considered to have a higher price than those houses that have two bathrooms and two bedrooms. Moreover, a house with a larger size (square feet) is deemed to be more costly than a smaller house. Thus, this study has value to the real estate industry and economy at large. Firstly, it assists in determining the cost of living of people in different settings. This provides an insight on the level of cost of living for a particular place. Moreover, it plays a role in measuring the living standards of people occupying houses that have different specifications. Lastly, this study is useful in budget and planning as it enables one to estimate the average price of a house that suits his or her specifications. This would add value to previous findings over the same topic of study. Therefore, the hypothesis being investigated is that the sales price of a home is determined by the number of bedrooms, number of bathrooms and size in square feet. To prove this hypothesis, the paper uses sales data for homes from Springfield. In this data, only four variables are considered in fitting a regression model as shown below: The above regression model can be summarized as: House Price = -591420.7785 + 326.5526297 sq-ft + 160839.1163 Baths + 8436.754376 Beds. An interpretation of this is that when the size of a house is increased by a single square feet, the price of the house increases by $326.5526297, when the number