The Bank of Canada is interested in studying the relationship between mortgage rates and median home prices. The data is provided below Year interest rate (%) Median home price 1988 10.30 $183,800 1989 10.30 $183,200 1990 10.10 $174,900 1991 9.30 $173,500 1992 8.40 $172,900 1993 7.30 $173,200 1994 8.40 $173,200 1995 7.90 $169,700 1996 7.60 $174,500 1997 7.60 $177,900 1998 6.90 $188,100 1999 7.40 $203,200 2000 8.10 $230,200 2001 7.00 $258,200 2002 6.50 $309,800 2003 5.80 $329,800 2004 5.80 $431,000 2005 5.80 $515,000 2006 6.40 $537,000 2007 6.30 $496,000 2008 6.00 $352,000 2009 5.00 $232,000 2010 4.70 $291,700 2011 4.40 $262,900 2012 3.60 $299,200 2013 4.00 $321,200 2014 4.10 $373,500 2015 3.80 $358,100 2016 3.60 $382,500 2017 4.00 $402,900 a) Estimate a simple linear regression model and find the value of the parameters for the estimation of mortgage rates and the median home price. All JASP input files and output tables should be provided. Interpret the intercept and the slope coefficients b) State the correlation coefficient and the coefficient of determination. Interpret the coefficient of determination c) Confirm the intercept, slope and correlation coefficient by computing them without JASP. At the 5% significance level, determine if the model is useful. In responding, construct and test any appropriate hypothesis
The Bank of Canada is interested in studying the relationship between mortgage rates and median
home prices. The data is provided below
Year interest rate (%) Median home price
1988 10.30 $183,800
1989 10.30 $183,200
1990 10.10 $174,900
1991 9.30 $173,500
1992 8.40 $172,900
1993 7.30 $173,200
1994 8.40 $173,200
1995 7.90 $169,700
1996 7.60 $174,500
1997 7.60 $177,900
1998 6.90 $188,100
1999 7.40 $203,200
2000 8.10 $230,200
2001 7.00 $258,200
2002 6.50 $309,800
2003 5.80 $329,800
2004 5.80 $431,000
2005 5.80 $515,000
2006 6.40 $537,000
2007 6.30 $496,000
2008 6.00 $352,000
2009 5.00 $232,000
2010 4.70 $291,700
2011 4.40 $262,900
2012 3.60 $299,200
2013 4.00 $321,200
2014 4.10 $373,500
2015 3.80 $358,100
2016 3.60 $382,500
2017 4.00 $402,900
a) Estimate a simple linear regression model and find the value of the parameters for the
estimation of mortgage rates and the median home price. All JASP input files and output
tables should be provided. Interpret the intercept and the slope coefficients
b) State the
coefficient of determination
c) Confirm the intercept, slope and correlation coefficient by computing them without JASP. At the 5% significance level, determine if the model is useful. In responding, construct and
test any appropriate hypothesis.
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