Wednesday, January 04, 2012

Answers for examine data used by a Real Estate investment advisor

Research Methodology

The questions give a careful statement of what is required and information about the presentation of your answers. Follow this carefully! Marks may be deducted for poor presentation.In particular, you are specifically required to state answers in bullet point. 

In this assignment you will examine data used by a Real Estate investment advisor. She wants you to answer some specific questions put by clients about houses prices in the neighbourhood encompassed by 4 suburbs around Colombo City. The data is contained in the file ‘Real_Estate.xls’ and contains the following columns (variables):

Variable Name Description
ID House Identity number
Price Selling Price of the house (in 000’s)
Bedrooms Number of bedrooms
Size House Size (m2)
Pool 0=House without a Pool
1=House with a Pool
Distance Distance from city centre (km)
Suburb Suburb number 
Garage 0=House without a Garage
1=House with a Garage

1. Random Sample:Before you begin your analysis you are required to take a random sample of size 100 from the 170 cases in the file. Use the file Random Sample Generator.xls to do this.Answers to the questions below are to be based on your sample of 100 cases.Make sure to keep a safe copy of the sample you use since you cannot use RandomSample Generator to reproduce it. Provide a printout of the data in your sample. The data is to be ordered by ID.

2. Introduction: Provide a one paragraph introduction to your small report. You simply need to state what the main purpose of the report is and which variables will be analysed. 

3. Summary table: 
i) Prepare a summary table that shows the mean, standard deviation and 95% confidence interval for the mean of the following variables: 
Selling Price, Number of bedrooms, Size of house, Distance from city centre 

ii) Use some of the information in (i) to describe a typical house in these suburbs.

iii) Prepare a summary table that shows the mean and standard deviation ofPrice for houses in the 4Suburbsaccording (subject) to the variableBedrooms. Think carefully about the layout of the rows and columns of your table. As well as means and standard deviations you should also include the number of houses in each group. So each cell in your final table should contain the mean, thestandard deviation and n, the number of houses in that group. 

iv) Comment, in bullet point form, on the Price of any combinations for Suburb and Bedroomsvariables (i.e. cells in the table).

4. A local real estate firm has told a client that the average Price of a house in Suburb 2 is valued at Rs 42 million.  You have been asked to evaluate this claim. Use a One Sample forthe Mean to evaluate the claim that the average price is Rs 42mln. In doing so clearly state the following:
any necessary assumptions required to do the test;
both null and alternative hypotheses;
an appropriate conclusion.

5. Price and Size of the house by Suburbs:A client wants information on size of the house as it relates to price.
I. Produce a scatter plot of Price vsSize (Sizeshould be on the horizontal axis). 
II. In bullet point form state what this tells you about the relationship between Size and Prices.
III. Fit a linear trend line on the scatterplot, showing the equation and the value of R2 and explain what it tells you about the way Prices change withincreasingSize.
IV. Produce a stratified scatter plot of Price against Size, split on Suburbs, and examine the relationship for the five Suburbs. Respond to the following question, giving evidence for your conclusions: 
V. In what ways does the relationship between Prices and Size vary as we move from one Suburb to another? 

6) Using information from your analyses write a short concluding paragraph about houses prices and sizes for different suburbs. 

Answers coming soon...  After January 7, 2012.......