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I'm given the following population regression equation:

PRICE(i) = β(0) + β(1)SQFT(i) + u(i) where the things in brackets are subscripts and SQFT represents the square footage.

A sample of houses is then given with their cooresponding prices and square footage.

I have solved such that β(1) = 108.7832 and β(0) = 11984.83

My question is how exactly to word the interpretation of the slope coefficient B(1) and the intercept coefficient β(0).

What I believe to be the answer is:

β1 means that a unit change in the sample living area of a house, measured in square feet, will result in an estimated $108.78 change in the price of the house and β0 represents the estimated price of the house that is not attributed to the living area size.

Is it accurate to be refer to an individual house in interpretation, as I have done, or should I be refering to houses collectively and refer to the mean sample living area and mean price.

Any help would be greatly appreciated. Thanks

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# Interpreting the values of slope and intercept coefficients using the CLRM

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