Exercise 3 Summary

Exercise Overview

  • Focus: Linear Regression with Multiple Regressors

  • Data: Rental price factors in Lucerne (rooms, city distance, size, construction year, floor level).

Steps to Conduct Analysis

  1. R Environment Setup

    • Import dataset: rental_data_lucerne_3.csv

    • Required packages: tidyverse, sandwich, lmtest, car

  2. Linear Regression Analysis

    • Conduct regression using independent variables.

    • Interpret coefficients for:

      • Size in square meters

      • Year of construction

  3. Model Comparison

    • Previous model R²: 74.87%.

    • Check adjusted R² after adding variables.

    • Determine if the new model better explains rental price variation.

  4. Multicollinearity Assessment

    • Investigate for evidence of multicollinearity (e.g., between number of rooms and size in square meters).

    • Address multicollinearity if present.