Real Estate Sales

Regression Assignment
SPRING 2014
C531 Introduction to Business Analytics
Submitted by: Mohammed Jawed Khan
Q1. Variable Modeling Type
Variable Modeling Data Type
PRICE Continuous
AREA Continuous
BEDROOMS Continuous
BATHROOMS Continuous
AIR_COND Nominal
GARAGE Continuous
POOL Nominal
YEAR Continuous
QUALITY Ordinal
STYLE Nominal
LOT Continuous
HIGHWAY Continuous
Q2. Labeling Nominal Variables
Q3. Continuous Variable Distribution
Variable Skewness Outliers
Price Not Symmetric Lots of outliers
Area Not Symmetric Not many outliers
Lot Not Symmetric Lots of outliers
Q4. Simple Regression of AREA on PRICE
(B) Estimated increase in
PRICE for an additional
square foot of area $158.9
(A) Percentage of
variation of the PRICE
values explained by AREA 0.67
Q5. Graph: YEAR vs. PRICE
Relationship: Price rise with time almost linearly after 1950 , Before 1960, the
relation was almost flat, independent of YEAR.
Q6. Full multiple regression model
Regressors
Log(Area)
BEDROOMS
BATHROOMS
AIR_COND
GARAGE
POOL
Log(Year_distance_1999)
QUALITY
STYLE
LOT
HIGHWAY
Dependent Variable Log ( PRICE)
LOG ( 1999 YEAR)
Q6. a Model and Significant Predictors
Q6. b. Explanation of Percentage of Variance
Percentage of variation of the
PRICE values explained by Model 0.861
The entire model is significant at 0.001
Q7. Interaction of Pool and Air-conditioning
Percentage of variation of the PRICE values
explained by this new Model = 0.861
Interaction effect significant at 0.0001 level,
hence there is interaction effect.
Since a new Variable is added which is highly
correlated, the parameter and coefficient
change.
R square levels off, the additional variable has
not provided much additional fit.