Using Weight Estimation to Model the Cost of Mall Construction

Developers who are considering plans to build a shopping mall use past data collected in mallcost.sav, to construct a linear model for predicting the construction costs. Major factors include the square footage, whether the proposed construction is an indoor or outdoor mall, and the experience of the architects. See the topic Sample Files for more information.

The developers know that as the size of the proposed mall increases, so does the cost of construction. They suspect that the cost of construction also becomes more variable; that is, you can less accurately forecast the final cost of construction. This would violate the assumptions of the typical linear regression, but could be accounted for in a weighted least squares model. Diagnose the need for WLS, then use the Weight Estimation procedure to correct the model.

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