Question

The data show the list and selling prices for several expensive homes. Find the regression​ equation, letting the the list price be the independent​ (x) variable. Find the best predicted selling price of a home having a list price of ​$ 2 million. Is the result close to the actual selling price of ​$ ​2.2 million? Use a significance level of 0.05. What is the regression​ equation? What is the best predicted selling price of a home having a list price of ​$ 2 ​million? Is the result close to the actual selling price of ​$ ​2.2 million?

List_price_(millions_of_$)   Selling_price_(millions_of_$)
1.6   2
4.2   4.6
2.1   1.8
1.6   1.9
2.3   2.4
4   3.6

Answer 1

For the given data using Regression in Excel we get output as

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.953204743
R Square	0.908599282
Adjusted R Square	0.885749103
Standard Error	0.383856189
Observations	6
ANOVA
	df	SS	MS	F	Significance F
Regression	1	5.858951038	5.858951	39.76333	0.003233458
Residual	4	0.589382296	0.147346
Total	5	6.448333333
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	0.281857977	0.416709786	0.676389	0.535887	-0.87511387	1.438829822
x	0.924610895	0.146628239	6.305817	0.003233	0.517505638	1.331716152