In a multiple regression, the dependent variable is house value (in '000) and one of the independent variables is a dummy variable, which is defined as 1 if a house has a garage and 0 if not.
The coefficient of the dummy variable is found to be 5.4 but the t-test reveals that it is not significant at the 0.05 level. Which of the following is true?
A) A garage increases the house value by 5,400.
B) A garage increases the house value by 5,400, holding all other independent variables constant.
C) The house value remains the same with or without a garage.
D) We need to include other dummy variables.
Question 2
When using regression analysis for descriptive purposes, which of the following is of importance?
A) The size of the regression slope coefficient
B) The sign of the regression slope coefficient
C) The standard error of the regression slope coefficient
D) All of the above
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