statistics and probability study resources
Added on - 26 Nov 2019
INTRODUCTIONThis report is based on a sample of 48 observations of houses in different localities,along with data on the no of rooms, bedrooms, bathrooms, listed price, final price andadv spend on each house. We use this data to answer research questions outlinedbelow, and use graphs/visual aids to present the data in easier ways for interpretation.Hopefully, Hikins & Main will be able to use this analysis for their investments in the future in realestate sector.RESEARCH QUESTIONSWe can look at this data to answer the following questions:We gauge the average price of a house in each locality. This serves as a rough guide forprospective buyers in terms of which area to consider, depending on their budget forthe house.What should be the adv spending on a house so that such spending fetches a higher finalprice. This will help sellers to decide if adv is worth the money, and returns from sellingcompensate the adv spending.How closely are listed and final price associated? If there is a close positive relation thenit may help sellers to set a higher fixed price, in hopes of a higher final price.Can we predict the final price of a house using some variables given to us? We attemptto find variables that can explain the variation in final price of a house. We ask if morebedrooms lead to a higher price or if higher adv spends can increase price at which ahouse is sold.SELECTED STATISTICAL METHODSWe will use Excel for this report and report on data given with the use of followingstatistical methods:Measures of central tendency -mean and medianMeasures of dispersionScatterplotsRegression techniques
Bar chartsTECHNICAL ANALYSISNote that the share of 5 localities is not even in the sample as seen below. Domaine has most no ofhouses while Mount has least.CityBeltonDomaineHillsMountTerratae101110710Next, we look at the average list and final price for each house, along with the % adv spend. This iscalculated as 100*adv spending/ final price. The table below shows that average final price is$752710, while average listed price is $700650. The average adv spend is 6.22% of final price. Allthree are positively skewed which implies that most houses lie at lower end of the range of values.listed Pfinal P% adspendMean700.65752.716.22Standard Error82.3991.590.36Median500.00535.005.96Mode400.00101.00#N/AStandardDeviation570.83634.562.49Sample Variance325842.83402668.006.19Kurtosis-0.510.14-0.11Skewness0.921.110.24Note that a simple average across localities can be misleading as we have differentsamples in each locality. The next chart shows average prices locality wise for betterunderstanding.