Prices and floor areas of houses in Palmerston North
price ≈ ea × areab
log (price) ≈ a + b × log (area)
This diagram gives two methods of predicting the response. The first method is:
Click on the scatterplot at any area (or log-area) to apply this method.
Select Using original scale from the pop-up menu to directly find the prediction from the nonlinear equation. (However the first method is easier to extend to find prediction intervals.)
The data set contains the sale prices ($thousand) and floor areas (square metres) from a sample of 143 houses that were sold in two suburbs of Palmerston North, New Zealand in 1999. All houses had been built in the previous 30 years.