obs PRICE SIZE

1964 18900 663.6

1965 20000 719.1
1966 21400 787.8
1967 22700 832.6
1968 24700 910 +
1969
1970
25600
23400
984.6
1038.5
PRICE i=f (SIZE i )+ε i=β 0
1971
1972
25200
27600
1127.1
1238.3 where PRICE i= the price (
1973
1974
32500
35900
1382.7
1500 SIZE i=the size (in square f
1975
1976
39300
44200
1638.3
1825.3 ε i=¿ the value of the stochastic error term
1977 48800 2030.9
1978 55700 2294.7
1979 62900 2563.3
1980 64600 2789.5
1981 68900 3128.4
1982 69300 3255
1983 75300 3536.7
1984 79900 3933.2
1985 84300 4220.3
1986 92000 4462.8
1987 104500 4739.5
1988 112500 5103.8
1989 120000 5484.4
1990 122900 5803.1
1991 120000 5995.9
1992 121500 6337.7
1993 126500 6657.4
1994 130000 7072.2
1995 133900 7397.7
1996 140000 7816.9
1997 146000 8304.3
1998 152500 8747
1999 161000 9268.4
2000 169000 9817
2001 175200 10100.8
2002 187600 10480.8
2003 195000 11107
 +
SIZE i )+ε i=β 0 +β 1 SIZE i +ε i 1 . 22
E i= the price ( in thousands of $) of the ith house ¿
ize (in square feet ) of that house
the stochastic error term for that house