How would you interpret the coefficient on x₃? A)We would expect to pay approximately $1,000 more for a house that is located 6 miles away from the beach. B)We would expect to pay approximately $6,040 more for a house that is located an additional mile away from the beach. C)We would expect to pay,on average,$1,000 less for a house that is located 6 miles away from the beach,given that the number of bedrooms and square footage of living space are held constant. D)We would expect to pay,on average,$6,040 less for a house that is located an additional mile away from the beach,given that the number of bedrooms and square footage of living space are held constant.

Question

Quizplus · Accepted Answer

The coefficient on x₃ indicates the effect of increasing the distance from the beach by one mile on the housing price, holding the number of bedrooms and square footage of living space constant. The coefficient value is negative, -6040, which implies that we would expect to pay less for a house that is located an additional mile away from the beach. Therefore, the best choice is D.

How Would You Interpret the Coefficient on X3

How Would You Interpret the Coefficient on X₃