Chapter 23, Problem 60E

Property assessments The following software output provides information about the Size (in square feet) of 18 homes in Ithaca, New York, and the city’s assessed Value of those homes.

Dependent variable is Value

R-squared = 32.5%

s = 4682 with 18 – 2 = 16 degrees of freedom

1. a) Explain why inference for linear regression is appropriate with these data.
2. b) Is there a significant association between the Size of a home and its assessed Value? Test an appropriate hypothesis and state your conclusion.
3. c) What percentage of the variability in assessed Value is explained by this regression?
4. d) Give a 90% confidence interval for the slope of the true regression line, and explain its meaning in the proper context.
5. e) From this analysis, can we conclude that adding a room to your house will increase its assessed Value? Why or why not?
6. f) The owner of a home measuring 2100 square feet files an appeal, claiming that the $70,200 assessed Value is too high. Do you agree? Explain your reasoning.