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Business Econometrics using SAS

Tools (BEST)

Class XIII and XIV Regression and

Review

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Home Price and Size Data

Sizein 000 SF;

Pricein 000 USD

Cross Section data for 59 cities across the US Question does price depend on size?

If yes, can we predict how?

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Import the Data

PROCIMPORT DATAFILE =

'c:\sasdata\sizeprice.xls' DBMS=EXCEL OUT =

homeprice replace;

RUN;

PROCPRINT DATA = homeprice;

TITLE 'Home Prices'; RUN;

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Plot

Graph the variables

1st step is there a linear relationship?

If not, OLS regression is not useful Remember that is why, print the data if

small or Summarize the data if large

Get a feel of the data set before crunching thenumbers

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SAS Scatter Plot

PROCGPLOT DATA=homeprice;

PLOT Price*Size;

RUN;

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Relation

A clear linear relation is observed

Ocular Estimation gives the go ahead

We know we can run a regression Use PROC REG

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Regression and Plot

PROCREG DATA=HomePrice;

MODEL Price=Size / clb;

PLOT Price*Size='+' p.*Size='*' / overlay; OUTPUT OUT=NEW P=PRED;

RUN;

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Plot with Regression Line

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ANOVA

Analysis of Variance

Source DF

Sum of

Squares

Mean

Square F Value Pr > F

Model 1 71534 71534 184.62

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Regression Estimates

Parameter Estimates

Variable Label

D

F

Parameter

Estimate

Standar

d

Error t Value Pr > |t|

95% Confidence

Limits

Intercept Intercept 1 5.43157 8.19061 0.66 0.5100

-

10.9761

9

21.8393

3

Size Size 1 56.08328 4.12758 13.59

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Inferences and Prediction

We want to

estimate the mean selling price for houses of size

1750 sq. feet

predict the selling price of a new house of size

1750 sq. feet.

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Prediction

DATA Xvalue;

INPUT size price;

CARDS;

1.750.;

DATA homeprice;

SET homeprice Xvalue;

PROCREG DATA=homeprice;

MODEL Price=Size / clm cli;

RUN;

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New Statements

The options clm and cli will give us ConfidenceIntervals for the mean of Y, for the values of X(the sizes) in the data set.

The CARDS statement lets you quickly appendadditional lines of data and should be used if youare adding a small amount of data internal toyour program

In case we had to get the same details(predictions) for a large dataset we would haveused the INPUT or IMPORT command

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Review

In the 2nd half of the class we will review the

entire semester

If there are any questions please let me

know.

If not, I will walk you through the salient

points of the course so that you get no

surprises on this material in the future.