A regression line for predicting the selling prices of homes in Chicago is y^ = 168 + 102x, where x is the square footage of the house. Interpret the residual for a house with 1800 square feet that recently sold for $200,000

the house was sold for 16,232 more than the expected based on the regression line

Explanation:

First, we determine know that the regression line for prediction of selling prices of homes in Chicago

y^ = 168 + 102x

No we extract the information required for the question as follows

1) The house has a square feet of 1800

2) The house was recently sold for $200,000

Therefore, based on the information and the predicting regression line

y^ = 168 + 102x

= y^ = 168 + 102 (1800)

y^ = 168 + $183,600

y^ = 183,768

Since observed value for 1800 square foot is y=$200,000

Residual is = 183,768 - 200,000

=-16,232

the house was sold for 16,232 more than the expected based on the regression line