Zoning and Housing Costs: The Impact of Land-Use Controls on Housing Price

By Lynne B. Sagalyn; George Sternlieb | Go to book overview

APPENDIX B: REDUCTION OF VARIABLES FOR REGRESSION ANALYSES

Initial regression analyses were run to reduce the preliminary set of variables listed in Exhibit B-1 to a parsimonious working set of regression variables with as little intercorrelation as possible. Many of these preliminary variables were found to be intercorrelated and redundant within the regression analyses; in many cases, one of the variables of the interrelated pair was adding noise within equation, possibly obscuring the relationship of the other variables upon selling price. The discussion that follows presents the findings of these preliminary regressions focusing upon the interrelationships among variables.

The statistics used for analysis of these variables were the intercorrelations among variables, the partial correlation coefficient of the variable with the dependent variable, and tests of significance for the partial correlation coefficient and the regression coefficient. The significance level for these tests was .05 for a one-tailed test, i.e., a 95 percent confidence level. Although these tests were used in reviewing the results of the preliminary runs, other than objectives of parsimony and descriptiveness, no precise criterion for removal was initially established. Rather some variables were selected over others or included in the final regression analyses to provide a clear understanding of the implications of public policy upon price variation.

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