A

Mortgage interest rates and home prices

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Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Average

X VARIABLE
30-year mortgage
interest rate (%)
10.30
10.30
10.10
9.30
8.40
7.30
8.40
7.90
7.60
7.60
6.90
7.40
8.10
7.00
6.50
5.80
7.75

Y VARIABLE
Median home price
$183,800
$183,200
$174,900
$173,500
$172,900
$173,200
$173,200
$169,700
$174,500
$177,900
$188,100
$203,200
$230,200
$258,200
$309,800
$329,800
$180,550

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27
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31
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33
34
35
36
37
38
39
40
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42
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46

To install Analysis ToolPak:

1. Click on Excel logo at the top right hand corner or go to the File menu
2. Select Excel Options.
3. Click Add-Ins.
4. Select Analysis ToolPak if it isn't selected already.
5. Click Go.
To create a scatter plot with a regression line:
1. With your cursor, select the range from cells B5 to C20.
2. Click on Insert and Scatter. A scatter chart will be generated.
3. On the scatter chart, right click on any point in the chart.
4. Choose "Add Trend Line."
5. Select "Linear," "Display Equation on Chart" and "R-Squared Value on Chart."
To generate more exhaustive diagnostics:
1. Click on Data, "Data Analysis," and then select "Regression."
2. In the Input Y Range, select C5:C20.
3. In the Input X Range, select B5:B20.
4. Under Output Options, choose "New Worksheet Ply," then click OK.

Demand estimation using linear regression

Y
City

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average

X1

Number of weekly riders Price per week

192,000
190,400
191,200
177,600
176,800
178,400
180,800
175,200
174,400
173,920
172,800
163,200
161,600
161,600
160,800
159,200
148,800
115,696
147,200
150,400
152,000
136,000
126,240
123,888
126,080
151,680
152,800

$15
$15
$15
$25
$25
$25
$25
$30
$30
$30
$30
$40
$40
$40
$40
$40
$65
$102
$75
$75
$75
$80
$86
$98
$87
$77
$63

160,026

$49.93

X2
Population of city

1,800,000
1,790,000
1,780,000
1,778,000
1,750,000
1,740,000
1,725,000
1,725,000
1,720,000
1,705,000
1,710,000
1,700,000
1,695,000
1,695,000
1,690,000
1,630,000
1,640,000
1,635,000
1,630,000
1,620,000
1,615,000
1,605,000
1,590,000
1,595,000
1,590,000
1,600,000
1,610,000

To generate the linear regression do the following:

1. Click on Data, then "Data Analysis," and select Regression.
2. In the Input Y Range, select B5:B31
3. In the Input X Range, select C5:F31
4. Under Output Options, choose "New Worksheet Ply" option, then click OK.

X3

X4

Monthly income of riders

Average parking rates per month

$5,800
$6,200
$6,400
$6,500
$6,550
$6,580
$8,200
$8,600
$8,800
$9,200
$9,630
$10,570
$11,330
$11,600
$11,800
$11,830
$12,650
$13,000
$13,224
$13,766
$14,010
$14,468
$15,000
$15,200
$15,600
$16,000
$16,200

$50
$50
$60
$60
$60
$70
$75
$75
$75
$80
$80
$80
$85
$100
$105
$105
$105
$110
$125
$130
$150
$155
$165
$175
$175
$190
$200

n, then click OK.