Lesson 11: Applied Regression Modeling (2 of 2)

February 23, 2022

Zoom Meeting Link: https://csupueblo.zoom.us/j/6114536052

Review:

• Multicollinearity
• Interaction variables
• Real Estate model
• Use model to estimate selling price
• Project 2: Multiple Regression Modeling posted

Presentation:

• Dummy Variables
  • incorporate categorical variables
  • binary – value is either 1 or 0
  • if 0, then the coefficient has no effect on y-hat
  • if 1, then the coefficient is added to (or subtracted from) the estimate
• Demonstration with Sample Real Estate data
  • create a dummy variable for a neighborhood

Activity:

• Use this larger Pueblo real estate data set
• Build a regression model to estimate selling price
  • You must use 1 interaction variable
  • You must use 1 or more Dummy variables to incorporate neighborhoods
  • Experiment with multiple combinations of variables to find the best model, maximizing R^2 and the F Statistic

Assignment:

• Complete Project 2 and submit here.