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9
X
9
+
10
X
10
Where,
x
1
= Area x
2
= No of Bed rooms x
3
= No of Bath rooms x
4
= Heating Method
x
5
= The architectural style of the home x
6
= Maximum number of cars that
can fit in the garage x
7
= Availability of basement facility x
8
= Age of the
house in years x
9
= Availability of Fire place facility x
10
= Nearby School
Correlation Test
Area BEDS BATHS HEAT STYLE GARAGE BASEMENT AGE FIRE SCHOOL PRICE
Area 1
BEDS 0.24 1
BATHS 0.61 0.39 1
HEAT 0.07 -0.03 -0.05 1
STYLE 0.31 0.09 0.50 -0.12 1
GARAGE 0.43 0.07 0.27 -0.02 0.19 1
BASEMENT 0.09 0.20 0.19 -0.05 0.34 0.20 1
AGE -0.29 0.28 -0.12 0.05 -0.16 -0.12 0.06 1
FIRE 0.32 0.01 0.31 0.07 0.25 0.13 -0.07 -0.28 1
SCHOOL 0.16 0.02 0.24 -0.14 0.39 0.15 0.22 -0.19 0.13 1
PRICE 0.83 0.25 0.56 -0.09 0.43 0.55 0.27 -0.39 0.34 0.32 1
Correlation Test (Hypothesis
Testing)
Dependent Independent Correlation P-Value Decision
Selling Price
AREA 0.83 0.000 Null Rejected
BEDS 0.25 0.004 Null Rejected
BATHS 0.56 0.000 Null Rejected
HEAT -0.09 0.000 Null Rejected
STYLE 0.43 0.188 Null Not Rejected
GARAGE 0.55 0.000 Null Rejected
BASEMENT 0.27 0.000 Null Rejected
AGE -0.39 0.005 Null Rejected
FIRE 0.34 0.000 Null Rejected
SCHOOL 0.32 0.001 Null Rejected
Partial Regression Test
Test of each variables to see their impact on
the dependent variable
H
0
= The independent variable doesnt have
any impact on the dependent variable (b1 = 0 )
H
a
= The independent variable has an impact on
the dependent variable (b1 0 )
Partial Regression Test
(Hypothesis Testing)
Dependent Independent b P-Value Decision
Selling Price
AREA 0.049 0.000 Null Rejected
BEDS 9.826 0.008 Null Rejected
BATHS 26.85 0.000 Null Rejected
HEAT -11.96 0.377 Null Not Rejected
STYLE 12.85 0.000 Null Rejected
GARAGE 43.56 0.000 Null Rejected
BASEMENT 19.31 0.005 Null Rejected
AGE -2.22 0.000 Null Rejected
FIRE 28.55 0.000 Null Rejected
SCHOOL 17.14 0.001 Null Rejected
Multiple Regression Test
Basic Equation
=
0
+
1
X
1
+
2
X
2
+
3
X
3
+
4
X
4
+
5
X
5
+
6
X
6
+
7
X
7
+
8
X
8
+
9
X
9
+
10
X
10
Where,
x
1
= Area x
2
= No of Bed rooms x
3
= No of Bath rooms x
4
= Heating
Method x
5
= The architectural style of the home x
6
= Maximum number of
cars that can fit in the garage x
7
= Availability of basement facility x
8
= Age
of the house in years x
9
= Availability of Fire place facility x
10
= Nearby
School
Multiple Regression Test
Coefficients(a)
Unstandardized
Coefficients
Standardized
Coefficients
Model
B Std. Error Beta t Sig.
1
(Constant) -15.212 9.818 -1.549 0.125
AREA 0.038 0.004 0.633 10.365 0.000
BEDS 4.924 1.965 0.127 2.506 0.014
BATHS -2.912 3.024 -0.061 -0.963 0.338
HEAT -12.91 6.101 -0.093 -2.116 0.037
STYLE 2.288 1.644 0.076 1.392 0.167
GARAGE 15.759 3.825 0.198 4.121 0.000
BASEMENT 9.077 3.445 0.126 2.635 0.010
AGE -1.034 0.281 -0.182 -3.676 0.000
FIRE 5.305 3.979 0.063 1.333 0.186
SCHOOL 4.622 2.534 0.086 1.824 0.071
a. Dependent Variable: Selling Price
The variables BATHS, STYLE, FIRE and SCHOOL were not
proven to be significant to be included into the model
Multiple Regression Test
REVISED REGRESSION MODEL
Housing Price (Y) = -12.5988 + .0383* Area + 4.3573* No
of Bed Rooms 14.5371* Heating Method +16.0610* the
number of cars that can fit in the garage + 11.3576*
Availability of basement facility - 1.2168* Age of the house
in years
REVISED REGRESSION MODEL (WITHOUT INTERCEPT)
Revised Housing Price (Y) = 0.04 * AREA -15.623 * HEAT
+14.303 * GARAGE + 12.483 * BASEMENT 1.030 * AGE
Model Adequacy Test
Correlation Coefficient, R = 99.3%
Coefficient of Determination, R
2
= 98.6%
Hypothesis Testing:
H
0
: The model is Adequate (
1
=
2
=
3
=
4.
=
4
=0)
H1: The model is not adequate (at least one 0)
Test Result:
P-Value (Sig.): 0.000
Decision Rule: Null is Rejected
Interpretation: The regression model is adequate
Summary of Findings
The area of the house has a positive correlation with
Housing price and the relationship is significant.
The number of bedrooms and bath rooms, both have
positive correlation with the housing price; however, the
relations are not statistically significant in predicting the
housing price.
The heating method of the house has negative correlation
with housing price. It means that the houses with gas forced
heating method tend to be priced less than those of with
electric heater.
The capacity of garage has positive correlation with the
housing price and the relationship is significant.
Summary of Findings
Age of the house is negatively correlated with housing price
and the relation is statistically significant. This means, that the
less is the age of the house, greater is the price of that house.
Availability of Fireplace and School nearby has positive
correlation with housing price but these relations are not
statistically significant.
The architectural style of the house has a positive correlation
with the housing price. However, it fails to prove significance in
estimating the housing price.
The multiple linear regression model estimated is adequate in
predicting the housing price in Oregon.