Statistics

Lind, Chapter 13, Exercise 42

A sample of 12 homes sold last week in St. Paul, Minnesota, is selected. Can we conclude that as the size of the home (reported below in thousands of square feet) increases, the selling price (reported in $ thousands) also increases?

a. Compute the coefficient of correlation.

Coefficients Standard Error t Stat P-value

Intercept 59.95717345 28.65750326 2.092198085 0.062896401

Home Size 31.69164882 24.44661008 1.296361692 0.223968044

The formula for the coefficient of correlation, . = 0.076.

a. Compute the coefficient of correlation is .308

b. Determine the coefficient of determination.

Regression Statistics

Multiple R 0.37931016

R Square 0.143876197

Adjusted R Square 0.058263817

Standard Error 15.25058359

Observations 12

The coefficient of determination is 14%.

b. Determine the coefficient of determination is .095

c. Can we conclude that there is a positive association between the size of the home and the selling price? Use the .05 significance level.

Yes, there is a positive correlation between the variables.

c. Can we conclude that there is a positive association between the size of the home and the selling price?