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# [Solution] High-Income People

Estimate a hedonic model using the dataset provided and considering the following parameters (you should use the Regression option in MS Excel add-in Data Analysis)  Dependent variable – house price Independent variables   Number of bedrooms  Number of bathrooms  Number of parking spaces  Distance from the Sydney CBD (kilometres)  Proportion of high-income people in the neighbourhood (earning >\$2,000/week)  Proportion of Australian born people in the neighbourhood Note: The Excel output should be provided as an appendix (at the end of the report) and will not be counted towards the word limit. The Residual Output is not required.  2. Provide economic interpretations for the coefficients of the following variables (referring to the nature of relationships between these variables and house prices) (25 marks): (a). Distance from the Sydney CBD (kilometres) (b). The proportion of high-income people in the neighbourhood (earning >\$2,000/week) (c). The proportion of Australian born people in the neighbourhood 3. (a). Briefly discuss two implications (one positive and one negative) arising from the relationship you discussed in question 2(a) on cities (10 marks). (b). Briefly discuss two ways in which governments can address the negative consequences of the relationship depicted in 2(a) (7.5 marks). (c). Briefly identify two consequences of the relationship represented in 2(b) on cities (7.5 marks)

Estimate a hedonic model using the dataset provided and considering the following parameters (you should use the Regression option in MS Excel add-in Data Analysis)  Dependent variable – house price Independent variables   Number of bedrooms  Number of bathrooms  Number of parking spaces  Distance from the Sydney CBD (kilometres)  Proportion of high-income people in the neighbourhood (earning >\$2,000/week)  Proportion of Australian born people in the neighbourhood Note: The Excel output should be provided as an appendix (at the end of the report) and will not be counted towards the word limit. The Residual Output is not required.  2. Provide economic interpretations for the coefficients of the following variables (referring to the nature of relationships between these variables and house prices) (25 marks): (a). Distance from the Sydney CBD (kilometres) (b). The proportion of high-income people in the neighbourhood (earning >\$2,000/week) (c). The proportion of Australian born people in the neighbourhood 3. (a). Briefly discuss two implications (one positive and one negative) arising from the relationship you discussed in question 2(a) on cities (10 marks). (b). Briefly discuss two ways in which governments can address the negative consequences of the relationship depicted in 2(a) (7.5 marks). (c). Briefly identify two consequences of the relationship represented in 2(b) on cities (7.5 marks)