In a regression of sale price on GLA, the coefficient on GLA represents:
Correct Answer
B) The estimated price change per additional square foot
Why this is correct: In a regression model (e.g., Price = a + b*(GLA) + ...), the coefficient (b) for Gross Living Area (GLA) represents the estimated change in the sale price for each one-unit increase in square foot, holding all other variables in the model constant. This is the marginal contribution. Why the other choices are wrong: It is not the total value of all improvements. It is not the percentage of price explained (that's R-squared). It is not the number of observations. Exam tip: The regression coefficient is your potential adjustment value per unit, all else being equal.
Why This Is the Correct Answer
Why this is correct: In a regression model (e.g., Price = a + b*(GLA) + ...), the coefficient (b) for Gross Living Area (GLA) represents the estimated change in the sale price for each one-unit increase in square foot, holding all other variables in the model constant. This is the marginal contribution. Why the other choices are wrong: It is not the total value of all improvements. It is not the percentage of price explained (that's R-squared). It is not the number of observations. Exam tip: The regression coefficient is your potential adjustment value per unit, all else being equal.
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