Homework: Regression Modeling
Purpose
This homework provides an opportunity to develop, evaluate, and apply bivariate and multivariate linear regression models.
1. Instructions:
The Excel file for this homework contains a database with information about the tax assessment value assigned to medical office buildings in a city. The following is a list of the variables in the database:
• FloorArea: square feet of floor space
• Offices: number of offices in the building
• Entrances: number of customer entrances
• Age: age of the building (years)
• AssessedValue: tax assessment value (thousands of dollars)
Use the data to construct a model that predicts the tax assessment value assigned to medical office buildings with specific characteristics.
• Construct a scatter plot in Excel with FloorArea as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
• Use Excel's Analysis ToolPak to conduct a regression analysis of FloorArea and AssessmentValue. Is FloorArea a significant predictor of AssessmentValue?
• Construct a scatter plot in Excel with Age as the independent variable and AssessmentValue as the dependent variable. Insert the bivariate linear regression equation and r^2 in your graph. Do you observe a linear relationship between the 2 variables?
• Use Excel's Analysis ToolPak to conduct a regression analysis of Age and Assessment Value. Is Age a significant predictor of AssessmentValue?
Construct a multiple regression model.
• Use Excel's Analysis ToolPak to conduct a regression analysis with AssessmentValue as the dependent variable and FloorArea, Offices, Entrances, and Age as independent variables. What is the overall fit r^2? What is the adjusted r^2?
• Which predictors are considered significant if we work with α=0.05? Which predictors can be eliminated?
• What is the final model if we only use FloorArea and Offices as predictors?
• Suppose our final model is:
• AssessedValue = 115.9 + 0.26 x FloorArea + 78.34 x Offices
• What would be the assessed value of a medical office building with a floor area of 3500 sq. ft., 2 offices, that was built 15 years ago? Is this assessed value consistent with what appears in the database?
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.