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You are trying to predict home prices as a function of the neighbor’s home prices and...

  1. You are trying to predict home prices as a function of the neighbor’s home prices and the amount of crime in the neighborhood. You expect the amount of crime to affect negatively both home price and neighbor’s home price. You calculate

HomePrice = a1 + b1NieghborsHomePrice

and

HomePrice = a2 + b2NieghborsHomePrice + b3Crime

You expect b1 to be positive and you expect b3 to be negative. Do you expect b2 to be larger than, less than, or equal to b1? Explain convincingly.

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