Here we will show an example of cost function for linear regression for house price prediction. Please note that instead of Linear Regression we could also use another type of function (For example: Neural Network) to make the prediction.

Dataset

Prediction function

f(input)=output

• Input - size, num_rooms, distance_from_city_center
• Output - predicted_price

f(size, num_rooms, distance_from_city_center) =

$$ size * \theta_1 + num\_rooms * \theta_2 + distance\_from\_city\_center * \theta_3 = predicted\_price $$

Let’s refer to size, num_rooms, distance_from_city_center and price as $x_1,x_2,x_3,y$ for better reading experience.