Estimate the effect of house size on house value

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A realtor wants to estimate the effect of house size on house value. they collect data on house size and house value and run a regression of house value(in $)House Value, on house size(in square feet),House Size. The regression yields a positive estimate of beta1, the effect of house size on house value. However, some other variables were omitted from the regression that may be correlated with both house value and house size, The regression omits the size of the property(in square feet), PropSize, Do you expect the correlation between house size and property size---Corr (HouseSize, PropSize) to be approximately>0,<0,=0(circle one?) Explain

Reference no: EM13999807

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