Housing Prices in Blowing Rock, NC:
A Hedonic Analysis

Thomas Carter

Economics 4000

1. Introduction
A difficult characteristic to understand about the housing market is how a price is given for a particular house. That price will be designated to that particular house alone. All houses have various pricing, so I can’t always assume that one will cost more or less than any other. The pricing for houses vary based on their characteristics. Each characteristic must be analyzed to determine its contribution or detraction toward the price. I have taken some of these characteristics and modeled the relationship between them and the price of real estate for a specific area.

How are these characteristics used in determining the price? A model that is commonly used in real estate appraisal is the hedonic regression. This method is specific to breaking down items that are not homogenous commodities, to estimate value of its characteristics and ultimately determine a price based on the consumers’ willingness to pay. The approach in estimating the values is done by measuring the differences in the price of certain goods with regards to specific location. E.g. average cost of real estate is much lower in Missouri than in California. Location may be the biggest factor in real estate pricing.

2. Data and Regression Analysis
My data is for Blowing Rock, NC. It’s a resort town in the Blue Ridge Mountains. The attractions here are mostly outdoor activities taking place in the secluded wilderness. The population is only about 1500 and the average cost of a house from my data is $485,839.50.

For my linear regression, I am modeling the relationship between the price of homes, being my dependent variable, and some characteristics of the homes, being my explanatory variables. Originally my data consisted of the following for real estate in Blowing Rock, NC: price - selling price, miles from central business district, number of bedrooms, number of full bathrooms,...

...LinearRegression deals with the numerical measures to express the relationship between two variables. Relationships between variables can either be strong or weak or even direct or inverse. A few examples may be the amount McDonald’s spends on advertising per month and the amount of total sales in a month. Additionally the amount of study time one puts toward this statistics in comparison to the grades they receive may be analyzed using theregression method. The formal definition of Regression Analysis is the equation that allows one to estimate the value of one variable based on the value of another.
Key objectives in performing a regression analysis include estimating the dependent variable Y based on a selected value of the independent variable X. To explain, Nike could possibly measurer how much they spend on celebrity endorsements and the affect it has on sales in a month. When measuring, the amount spent celebrity endorsements would be the independent X variable. Without the X variable, Y would be impossible to estimate. The general from of the regression equation is Y hat "=a + bX" where Y hat is the estimated value of the estimated value of the Y variable for a selected X value. a represents the Y-Intercept, therefore, it is the estimated value of Y when X=0. Furthermore, b is the slope of the line or the average change in Y hat for each change of one unit in the independent...

...Linear -------------------------------------------------
Important
EXERCISE 27 SIMPLE LINEARREGRESSION
STATISTICAL TECHNIQUE IN REVIEW
Linearregression provides a means to estimate or predict the value of a dependent variable based on the value of one or more independent variables. The regression equation is a mathematical expression of a causal proposition emerging from a theoretical framework. The linkage between the theoretical statement and the equation is made prior to data collection and analysis. Linearregression is a statistical method of estimating the expected value of one variable, y, given the value of another variable, x. The term simple linearregression refers to the use of one independent variable, x, to predict one dependent variable, y.
The regression line is usually plotted on a graph, with the horizontal axis representing x (the independent or predictor variable) and the vertical axis representing the y (the dependent or predicted variable) (see Figure 27-1). The value represented by the letter a is referred to as the y intercept or the point where the regression line crosses or intercepts the y-axis. At this point on the regression line, x = 0. The value represented by the letter b is referred to as the slope, or the coefficient of x. The slope determines the...

...Linear-Regression Analysis
Introduction
Whitner Autoplex located in Raytown, Missouri, is one of the AutoUSA dealerships. Whitner Autoplex includes Pontiac, GMC, and Buick franchises as well as a BMW store. Using data found on the AutoUSA website, Team D will use LinearRegression Analysis to determine whether the purchase price of a vehicle purchased from Whitner Autoplex increases as the age of the consumer purchasing the vehicle increases. The data set provided information about the purchasing price of 80 domestic and imported automobiles at Whitner Autoplex as well as the age of the consumers purchasing the vehicles. Team D selected the first 30 of the sampled domestic vehicles to use for this test. The business research question Team D will answer is: Does the purchase price of a consumer increase as the age of the consumer increases? Team D will use a linear-regression analysis to test the age of the consumers and the prices of the vehicles.
Five Step Hypothesis Testing
Team D will conduct the two-sample hypothesis using the following five steps:
1. Formulate the hypothesis
2. State the decision rule
3. Calculate the Test Statistic
4. Make the decision
5. Interpret the results
Step 1- Formulate the Hypothesis
Using the research question: Does the purchase price of an automobile purchased at Whitner Autoplex, increase as the age of the...

...
A. DETERMINE IF BLOOD FLOW CAN PREDICT ARTIRIAL OXYGEN.
1. Always start with scatter plot to see if the data is linear (i.e. if the relationship between y and x is linear). Next perform residual analysis and test for violation of assumptions. (Let y = arterial oxygen and x = blood flow).
twoway (scatter y x) (lfit y x)
regress y x
rvpplot x
2. Since regression diagnostics failed, we transform our data.
Ratio transformation was used to generate the dependent variable and reciprocal transformation was used to generate the independent variable.
3. Check if the model is adequate by checking the t-statistic, R2 and F-statistic.
F statistic reveals that the equation used to determine the relationship between the x and y is functional. Using the test statistic for the test of coefficients, it was revealed that the constant value in the equation is not significantly different from 0. Also, it was revealed that the transformed x, significantly explains the dependent variable. Also, it was revealed that the measure of proportion of variability explained by the fitted value is relatively high with 96.23%. This means that transformed data in blood flow explains 96.23% of the variation in the transformed data in arterial oxygen.
4. Check the normality of residuals and equal variances
predict r, resid
kdensity r, normal
pnorm tx
qnorm tx
rvpplot tx
Before we could perform the numerical test, we must...

...Chapter 13
LinearRegression and Correlation
True/False
1. If a scatter diagram shows very little scatter about a straight line drawn through the plots, it indicates a rather weak correlation.
Answer: False Difficulty: Easy Goal: 1
2. A scatter diagram is a chart that portrays the correlation between a dependent variable and an independent variable.
Answer: True Difficulty: Easy Goal: 1 AACSB: AS
3. An economist is interested in predicting the unemployment rate based on gross domestic product. Since the economist is interested in predicting unemployment, the independent variable is gross domestic product.
Answer: True Difficulty: Medium Goal: 1 AACSB: REF
4. There are two variables in correlation analysis referred to as the dependent and determination variables.
Answer: False Difficulty: Easy Goal: 1
5. Correlation analysis is a group of statistical techniques used to measure the strength of the relationship (correlation) between two variables.
Answer: True Difficulty: Easy Goal: 2 AACSB: AS
6. The purpose of correlation analysis is to find how strong the relationship is between two variables.
Answer: True Difficulty: Easy Goal: 2
7. Originated by Karl Pearson about 1900, the coefficient of correlation describes the strength of the relationship between two, interval or...

...EXECUTIVE SUMMARY
The study is undertaken to study retailers behavior towards Aircel in selected region. The data is collected directly by visiting outlets through structured interview scheduled. The statistical tools used to analyze the data are: Co-relation analysis, Simple LinearRegression and Multiple LinearRegression. The software used to analyze the data is Windostat version 8.6, developed by Indostat services, is an advanced level statistical software for research and experimental data analysis.
The study is carried mainly in the areas like Lokthkunta, Lalbazar, Kharkhana, Old Alwal, Suraram, Medchal, Miyapur, Balanagar, Bollaram, Yapral, Anandbagh, Malkajgiri, ECIL areas in Hyderabad city.
1. INTRODUCTION
Telecommunication was one of the world powerful tool of development. It is one of the key changer for continuous growth and in areas of reducing poverty, employment development, gender equity, balanced regional development and special protection for vulnerable sections of the society. Indian telecommunication sector has undergone as a growth engine for the Indian economy in the last decade with the country experiencing huge growth in wireless sector. The penetration of internet and broadband has also improved.
Telecom sector is broadly divided into:
1. Fixed line telephony.
2. Mobile telephony.
a. Global System for Mobile Communications (GSM) and
b. Code Division Multiple...

...Scatter Plots
Linearregression is a crucial tool in identifying and defining key elements influencing data. Essentially, the researcher is using past data to predict future direction. Regression allows you to dissect and further investigate how certain variables affect your potential output. Once data has been received this information can be used to help predict future results. Regression is a form of forecasting that determines the value of an element on a particular situation. Linearregression allows us to create formulas to define the effects of a variable. Data analysis is an important concept in improving business results. There is no reason why we would not use the data to help forecast for the future. The information is available and reliable and will explain the breakdown of the entire business process.
Break Even Calculations
Break-even calculations are used to denote a firm's capital structure, to the extent to which fixed income securities, debt and preferred stock, are used. The operating leverage can be depicted by graphs to demonstrate relevant probability distributions. Break even points are determined by the quantity measurement of operating income (EBIT) being equal to zero, which applies that sales revenues are equal to costs.
Break-even analysis, from an operational perspective focuses on the choice of processes, which implies that the two...

.... The following sample observations were randomly selected.
X: 5 3 6 3 4 4 6 8
Y: 13 15 7 12 13 11 9 5
a. Determine the coefficient of correlation.
b. Determine the coefficient of determination.
c. Interpret the result.
. The following sample observations were randomly selected.
X: 5 3 6 3 4 4 6 8
Y: 13 15 7 12 13 11 9 5
a. Determine the coefficient of correlation.
b. Determine the coefficient of determination.
c. Interpret the result.
. The following sample observations were randomly selected.
X: 5 3 6 3 4 4 6 8
Y: 13 15 7 12 13 11 9 5
a. Determine the coefficient of correlation.
b. Determine the coefficient of determination.
c. Interpret the result.
X Y XY
5 13 65 25 169
3 15 45 9 225
6 7 42 36 49
3 12 36 9 144
4 13 52 16 169
4 11 44 16 121
6 9 54 36 81
8 5 40 64 25
39 85 378 211 983
a.
The 0.89 indicates a very strong negative relationship between X and Y.
b. The coefficient of determination is 0.7921, found by (0.89)2.
c. X accounts for 79 percent of the variation in Y.
2. Bi-lo Appliance Stores has outlets in several large metropolitan areas in New England. The general sales manager plans to air a commercial for a digital camera on selected local TV stations prior to a sale starting on Saturday and ending Sunday. She plans to get the information for Saturday-Sunday digital camera sales at the outlets and pair them with the number of times the advertisement was shown on the local...