Suppose in an attempt to estimate the effect of how listing with a real estate agent impacts a house's selling price you estimate the following regression: Pricei = 10.2 (3.2) + 2.3 (0.8) Agent + -2.9 (0.3) Distance to Downtowni, where Distance to Downtown is a proxy variable, which can be used to control for the desirability of the location, and the standard errors for each coefficient are reported in parenthesis. How should we interpret the regression results for the coefficient on Agent?
A. The unconditional correlation between whether a listing is listed with an agent and how far it is from downtown is negative.
B. Listings with an agent sell for higher prices holding fixed the desirability of the location of the listing.
C. The unconditional correlation between housing prices and house sales with a listing agent are positive.
D. None of the answers is correct.
Answer: B
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