Abstract

Housing price is a popular and important topic in todays society. This article aims to find the factors that have impacts on the housing price. To find the relationships between factors, this article uses Multiple Linear Regression as the method to perform a significant analysis of factors. 1000 samples of Californias block groups in 1990 are selected for this research. Based on the assumption, this research chooses 8 explanatory variables for the analysis. Because of the relationships between explanatory variables, the article also adds interaction terms between latitude and longitude, and population and total bedrooms to solve the multicollinearity problem among explanatory variables. To optimize model analysis effectiveness, this research compares the significance, VIF value, and GVIF value of explanatory variables. The analysis result shows that the geographical location (Latitude and longitude), the housing median age, the total bedrooms, the population, and the median income make significant impacts on the housing value. Among these factors, the median income is the main factor.

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