A real estate analyst believes that the three main factors that influence an apartment's rent in a college town are the number of bedrooms,the number of bathrooms,and the apartment's square footage.For 40 apartments,she collects data on the rent (y,in $),the number of bedrooms (x₁),the number of bathrooms (x₂),and its square footage (x₃).She estimates the following model: Rent = β₀ + β₁ Bedroom + β₂ Bath + β₃Sqft + ε.The following table shows a portion of the regression results. When testing whether Bedroom is significant at the 5% significance level,she ___________________________________________________________________. A) rejects H₀:β₁ = 0,and concludes that the number of bedrooms significantly influences rent B) does not reject H₀:β₁ = 0,and concludes that the number of bedrooms significantly influences rent C) rejects H₀:β₁ = 0,and concludes that the number of bedrooms does not significantly influence rent D) does not reject H₀:β₁ = 0,and concludes that the number of bedrooms does not significantly influence rent

Question

Quizplus · Accepted Answer

The analyst tests whether Bedroom is significant at the 5% significance level by examining the p-value associated with the coefficient β1. From the regression results table, we see that the p-value for the coefficient β1 is 0.021, which is less than 0.05. Therefore, we reject the null hypothesis H₀:β₁ = 0 and conclude that the number of bedrooms significantly influences rent.

A Real Estate Analyst Believes That the Three Main Factors