Simple statistics question.

Statistics - hypothesis test question?

• OK, I am doing a homework assignment for my business statistics class (BUSA 208). I have a problem I am struggling with regarding multiple regression analysis. Basically, the question is as follows: A real estate agent wishes to determine the selling price of residences using the size (square feet) and whether the residence is a house or a condo. I am given a table containing a sample of 20 residences. The table includes the selling price, the square footage, and whether it is a house or a condo. In this instance, the selling price would be the dependant variable, while the square feet and the type of dwelling are the 2 independant variables. The type of residence is a dummy variable, with x2 = 1 if a condo, and x2 = 0 if it is a house. I have run a multiple regression ananlysis is excel, and was able to answer parts A, B, and C of the question with no problem. I am a little confused as to what part D is asking, and Im not sure what I should be testing. Part D is worded as follows: "D. Conduct a test of hypothesis to determine if the relationship between the selling price and the square footage is different between condominiums and single family homes." I know how to do hypothesis tests, that isn't the issue. I guess I'm just confused as to what exactly I should be testing. Do I just need to run a test on the significance of the dummy variable (house or condo)? If not, what do I need to do? Any suggestions would be great!

• Answer:

  Yes, run a test on significance of the dummy variables.... Good luck!