An additive linear regression models sale price in dollars using living area in square feet and other predictors, with no interactions or transformations. The living-area coefficient is 85. Holding the other predictors fixed, what does it mean?
Correct Answer
C) The fitted price increases by $85 per additional square foot
With sale price measured in dollars and area in square feet, a coefficient of 85 means an additional square foot raises fitted price by $85 with other encoded predictors fixed. The additive, untransformed model has no interaction that changes this slope. It says neither 85% variance explained nor 85 observations or rooms. Association alone does not establish a causal or automatically supportable appraisal adjustment.
Why This Is the Correct Answer
With sale price measured in dollars and area in square feet, a coefficient of 85 means an additional square foot raises fitted price by $85 with other encoded predictors fixed. The additive, untransformed model has no interaction that changes this slope. It says neither 85% variance explained nor 85 observations or rooms. Association alone does not establish a causal or automatically supportable appraisal adjustment.
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