Linear Regression Analysis of Apartment Price vs Surface Area
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Linear regression, apartment price, surface area, correlation coefficient, variance, covariance, statistical analysis, real estate pricing
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Abstract
This document presents a statistical analysis of the relationship between apartment surface area and price, using linear regression to model the correlation.
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[...] The linear correlation coefficient is equal to: The linear correlation coefficient, approximately equal to 0.97, is very close to which means that the positive linear correlation between the surface in m², and the price of an apartment, is very important. The linear correlation being positive, the larger the surface, the higher the price of the apartment increases, which is logical. In addition, this coefficient being very close to the linear model is of very good quality. With our model, the price of an apartment in thousands of euros, of 60 m², is equal to: Therefore, according to our model, the price of a 60 m² apartment is approximately equal to 393,695 euros. [...]
[...] The standard deviation of X is therefore Calculation of the variance of " The standard deviation of Y is therefore Calculation of the covariance of X and Calculation of the model coefficient Calcul du coefficient du modèle : The coefficient , on deduces that the regression line is an increasing line, which is logical, because the larger the surface of the apartment, the higher the price of the apartment. In addition, as , then, for 1m² additional, the price of the apartment increases by 6613 euros. With regard to the coefficient , this is therefore negative, it corresponds to the price in thousands of euros, of an apartment of 0 m², therefore euros. It is not necessary to give too much importance to this coefficient, because an apartment of 0 m², does not exist, and therefore costs 0 euros. [...]
