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BA 240 Spring 2008
W. Li
06/03/2008
QUIZ 8 Solution
Problem 1
:
A Florida real estate appraisal company regularly employs a paired sales technique to
evaluate land sales. When two parcels of land are sold, the ratio of the acreage of the
larger parcel to the smaller parcel is calculated as well as the difference in sale prices
(measured as a percentage of the higher sale price and called a downward adjustment).
The variables land sale ratio
x
(in %) and downward price adjustment
y
(in Thousands of
dollars) were measured for a random sample of 14 pairs of land sales in Seminole
County, Florida as followings:
a)
Write down the model, and find the yintercept and the slope .(4 points)
Model:
x
y
1
0
where
y
is the downward price adjustment and
x
is the land sale ratio.
371
.
0
14
9
.
554
25
.
43487
14
567
9
.
554
2
.
30447
2
2
2
1
n
x
x
n
y
x
xy
b
796
.
25
14
9
.
554
371
.
0
14
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This note was uploaded on 05/15/2011 for the course BA 240 taught by Professor Li during the Spring '08 term at Bellevue College.
 Spring '08
 Li
 Sales

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