Example 2: Apartment Buildings

1
Example 2 Apartment Buildings

• 10 apartment buildings in a college town, each
  contains 100 rental units.
• Have data on the number of apartments rented, the
  rental price, the amount spent on advertising,
  the distance to campus.

2
Example 2 Apartment Buildings

• What is the estimated demand function for the
  rental units?
• If the owner raised rents at one complex by
  100, what would you expect to happen to the
  number of units rented?
• If the owner raised rents at an average
  apartment building, what would happen to the
  revenues?
• What inferences should be drawn from this
  analysis?