Car Lab

By: Dan Lulseged

By:
Explain why you chose this car and create a codebook for your
variables.
I chose this car because I like it’s appearance.
CODEBOOK: YEAR: The Year the car was made. Car_Age: How old the car is. Mileage: How many
miles the car has traveled. Car_Price: The amount that is required to buy the car.

Insert picture of data set:

Create a correlation table.
Describe the correlation (Direction,Strength, Shape) between
a) Car Age / Car Price= Negative, Strong, Linear
b) Mileage / Car Price= Negative, Strong, Linear
c) Of these pairs, what is the strongest correlation. Explains why is
makes sense.

Car Age/ Car price is the strongest with a -0.96 correlation. This
Makes sense because newer cars are typically more popular and
More convenient which means the price for them is high.
 Scatter Plots
Add a scatterplot of the data (Car age and Price) Add a scatterplot of the data (Mileage and
Price)
r = -0.96
r = -0.95
Thoughts on the scatterplot
Thoughts on the scatterplot
This scatter plot is pretty strong,linear, and
negative This scatter plot is similar to the previous in
being negative but it’s weaker and less linear.
 Regression Line 1 (Age and Price)

Find the Regression Equation 1 (Age and Price) with picture

Add a scatterplot with a of table
regression line of the data Y= 10470+-8283.2x

(What does the slope tell us?)

It tells us that the value is decreasing by around 8,283.2

dollars per year the car ages
 Regression Line 2 (Mileage and Price)

Find the Regression Equation 2 (Mileage and Price) with

Add a scatterplot with a picture of table
regression line of the data Y= 102500+-1x

Interpret the slope: (What does the slope tell us?)

This tells us that for every mile the car has the value is
going down by around one dollar.
 Prediction
● Use the regression line to predict the value of your car in 10 years
● 10470+-8283.2(10)= -72362 This means that in ten years your car would lose
72,362 of value. -72362-10470/10470= -5.91= -591%
● Use the regression line to predict the value of your car in after 130,000 miles.
● 102500+-1(130,000)= -27,500. -27,500-102500/102500= -1.27= -127%
● Comment on if this is good investment (Use percentage increase or decrease to
answer question)
● This is definitely not a good investment because after 10 years the value is
decreased by -591 percent which is already insane and the mileage decreasing
the value by around 1 percent per mile will add up.
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