Question

Simple regression analysis
The following data were collected to study the relationship between the sale price, y and the total appraised value, x, of a residential property located in an upscale neighborhood.

Property	x	y	x2	y2	xy
1	2	2	4	4	4
2	3	5	9	25	15
3	4	7	16	49	28
4	5	10	25	100	50
5	6	11	36	121	66

Draw a scatter diagram of the sale price and the total appraised values

Calculate the Pearson’s coefficient of correlation, r

Describe the relationship between the sale price and the total appraised value

Find a regression equation of the sale price based on the total appraised value

Predict the sale price if the sale price and the total appraised value is 3.

Answer 1

Scatter plot with regression line

Perfect positive correlation between x and y

for x= 3 predicted price given by

y=-2.2+2.3*(3)=-2.2+6.9=4.7