The following data consists of 6 homes with variables Price sale price in tens of thousands of dollars, Floor floor size in thousands of square feet, and Lot lot size.

Floor

Lot

Price

1.9

2

25

1.7

5

26

1.7

4

26

1.2

4

27

2

3

27

2.2

3

28.5

Consider the first order multiple regression model:

Where Price, Floor, and Lot. Perform the following calculations, by hand using matrices:

1. Calculate the least squares estimate of and What's the first row, second column entry of ? (Round to the nearest fourth decimal)

We know that the least square estimate of .

Now here,

and

Which gives,

6

10.7

21

X'X

10.7

36.5

21

36.5

79

Thus,

So the first row, second column entry of is .

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