MATH 105:15 - Lab 7 - Rent Comparison
Solution
Rent
Population
Distance
Income
Pubs
Rent
1
Population
0.78218314
1
Distance
-0.7618285
-0.5338833
1
Income
0.74265576 0.31247565
-0.358438
1
Pubs
0.71893749 0.88474782 -0.46673705 0.24312338
1
a) How does the distance from the beach affect the rent?
As distance increases, rent decreases (strong negative correlation -0.76).
b) How does Income affect the number of pubs?
Little to no correlation, so no effect (very weak 0.24).
c) Population vs Pubs:
Slope
Intercept
0.04960637 4.31720085
=SLOPE(E3:E35,B3:B35)
=INTERCEPT(E3:E35,B3:B35)
d) How many more people does it take to open another pub?
Another bar opens with
20159 more people.
=1/C51*1000
e) Which pair(s) of independent variables (excludes Rent) are inter-related?
Population and pubs (correlation 0.8847)
f) Which variable(s) should NOT be used to help predict the rent? Why?
Pubs, related to population, but less correlated to rent (0.72) than is population (0.78).
g) What is the predicted rent for a room in a city 50 km from the beach with
population 400,000, average household income of $100,000, and 20 pubs?
Coefficients
Values
Intercept
278.4976
1
278.50
=B68*C68
Population
2.1757
400
870.28
Distance
-9.2723
50
-463.62
Income
9.6476
100
964.76
$
1,649.91
=SUM(D68:D71)
The predicted rent is
$
1,649.91
h) How much would you expect the rent to differ for a city with identical features
but 10 km further away from the beach?
$
92.72
=B70*(-10)
The rent would be expected to be
lower
by about
