Data Island is a beautiful beach resort. It has been a premier touristic destination for over 80 years, and the earliest holiday homes have been built just a few steps away from the beach itself. You work for a real estate agency that sells and rents holiday homes in Data Islands. Recently, one of the interns working on the Data Science Team presents you a report. According to the linear regression model they have run, the price of a house is proportional to its age. But this does not make any sense: after all, newer houses should be worth more.
1. Comment the regression output, noticing that the Sig. column is reporting the p-value of the coefficient. What can you tell about the sign of Age’s slope?
2. Why do you think the model forecasts an higher price for old holiday homes? Think carefully about all the information you have concerning Data Island.
3. Assuming that more data and variables are available, what would you suggest your intern to do to fix their report?
