VHA model review

Abstract : A regression model is used by the Office of the Secretary of Defense (OSD) to predict median rents so as to find variable housing allowance (VHA) as a supplement to Basic Allowance for Quarters (BAQ). These allowances are made for service members in the continental United States. It is this model that is reviewed in this theses. Median rental data taken from the annual VHA survey are used to test this model. From this analysis, the model indicates lack of fit, invalid assumptions and perhaps not even a 'resonable' approach. A more sensible approach is used to propose two other regression models. These models are a Weighted Regression Model which, like the current model, predicts medians; and an Analysis of Covariance model which predicts or analyzes the mean rent. More reasonable predictions of median and mean rent are indicated by these two models respectively. (KR)