Tham khảo tài liệu 'private real estate investment: data analysis and decision making_7', tài chính - ngân hàng, đầu tư bất động sản phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Uncertainty Risk in Real Estate 133 132 per square foot. The result is that the empirical test of our theory about houses being worth 132 per square foot shows that it is less than perfect. Most applications are. Univariate regression is the process of finding the conditional mean in that it helps you predict the mean of one quantity conditioned on knowing some other independent quantity. In this case the fact that we know is the size of the house. But is that fact fully determinative Table 6-7 shows the residuals defined as the difference between the observed price and the predicted price. This difference in a statistical sense is a measure of the error between what our claim is that houses sell for 132 per square foot and what really happens. This sort of thing while statistically valid is only partially helpful in guiding an individual property owner to the value of his property. Compare the output in Table 6-7 with the regression output of the circle example in Table 6-5. The R-square for the house price regression is only 66 residuals are non-zero standard errors are positive and confidence intervals are positive. All of this states the obvious relying on price per square foot as an indicator of value is less than perfect. From this we conclude that in a more complex world determinism rarely exists and the rule is uncertainty. Diameter completely determines the circumference of all circles. Size only partially determines the price at which a house sells. The positive standard errors of the residuals are measures of how much our theory is wrong for particular houses. The 34 unexplained part encompasses the non-size characteristics that determine value. The effects of these characteristics are embedded in the error terms. This suggests that our 132 theory of house prices based on the single variable size and a linear relationship is simplistic something any home buyer or seller 10Mathematicians will object with the casual use of linear a term that has a
