CAR WORTH DATA SET: For this data set, a representative sample of over eight hundred, 2005 GM cars were selected, then an algorithm was developed following the 2005 Central Edition of the Kelly Blue Book to estimate retail price.
- Price: suggested retail price of the used 2005 GM car in excellent condition. The condition of a car can greatly affect price. All cars in this data set were less than one year old when priced and considered to be in excellent condition.
- Mileage: number of miles the car has been driven
- Make: manufacturer of the car such as Saturn, Pontiac, and Chevrolet
- Model: specific models for each car manufacturer such as Ion, Vibe, Cavalier
- Trim (of car): specific type of car model such as SE Sedan 4D, Quad Coupe 2D
- Type: body type such as sedan, coupe, etc.
- Cylinder: number of cylinders in the engine Liter: a more specific measure of engine size
- Doors: number of doors
- Cruise: indicator variable representing whether the car has cruise control (1 = cruise)
- Sound: indicator variable representing whether the car has upgraded speakers (1 = upgraded)
- Leather: indicator variable representing whether the car has leather seats (1 = leather)
- Import the car worth csv file.
- Construct a plot so that you can assess the distribution of car prices from this sample. Answer Question 1 below.
- Determine the min, max, and mean of car prices from this sample. Answer Questions 2-3 below.
- Determine what percent of cars that cost at most $20,000. Answer Questions 4 below.
- Construct a scatterplot to visually determine the strength of the association between price and mileage. Answer Question 5 below.
- Construct an appropriate test to determine whether there is a significant linear relationship between price and mileage. Answer Question 6 below.
- Now, build a model that allows you to predict price from mileage. Answer Questions 7-8 below.
- Determine the mean price for each make and then determine whether a car’s make is significantly associated with it’s price. If necessary, construct a post-hoc test to reveal what makes have significantly different mean prices. Answer Questions 9-10 below.
- Build a model that allows you to assess the relationship between price and mileage, controlling for make. Answer Question 11 below.
- Create a new variable called “LowMileage” have it equal 1 if a car has mileage under 10,000 miles and 0 otherwise.
- Create a new variable called “HighDemandFeatures”, have it equal the number of high demand features that a particular car has. Suppose these features include whether the car has cruise control, upgraded speakers, leather interior, and low mileage.
- Finally, determine the mean price of the cars based on the number of high demand features it has. Answer Question 12 below.
Questions to answer in moodle:
Question 1: Which of the following best describes the distribution of car prices?
Question 2: What is the least expensive car in this sample? The most expensive?
Question 3: What is the mean car price in this sample?
Question 4: ___% of cars in the sample cost at most $20,000.
Question 5: Which of the following best describes the scatterplot you obtained?
Question 6: State the appropriate p-value that corresponds with the test you selected. What can you conclude?
Question 7: Suppose two cars are identical, except that one has one more mile on it’s odometer. What is the expected price difference based on this model?
Question 8: Suppose two cars are identical, except that one has 60,000 more mile on it’s odometer. What is the expected price difference based on this model?
Question 9: What is the mean price of the cars in the sample based on make?
Question 10: What is the test statistic and p-value to determine whether price is significantly associated with make. What can be concluded?
Question 11: After controlling for make, what can be said about the relationship between mileage and price?
Question 12: A car with no high demand features has an average price of __________. A car with 4 high demand features has an average price of ___________.
Check your answers by submitting them on moodle under Practice A for Exam 4.