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Property Price Dataset
Property Price Dataset
Property Price Dataset
In this project the main idea is finding the correlation between the population and the property
price in Ireland. The main hypothesis is that property price is increasing in main cities as the
population grows up. Here we analyze the information about 5 main cities in Ireland which are
Cork, Dublin, Galway, Waterford and Limerick. These cities are the destination of most
immigrants in recent years.
More facilities and the industry developments, better education perks and universities, more job
opportunities, better communication positions and etc. in the urban area make the population
(mostly young people) to prefer to migrate from rural areas to main cities. Ireland cities have also
immigrants from other countries because of its better conditions for life.
These circumstances created more need to have residential properties in the urban areas in Ireland.
As the demand is increasing, the price of properties is growing up in main cities few times more
than rural areas. Here we will analyze the property price and population data in main cities and
show that the correlation between property price and population in recent years are really strong.
We will firs work on the datasets, explain and visualize the main properties of them, then we use
a predictive model in R language to see how we can relate the property price and population in
main cities. We have chosen linear regression model to do this analysis.
Data Description
In this problem we have two main datasets. One is about property price in different cities in Ireland
and the other is about population in different counties in Ireland. Let’s take a look at them step by
step.
Hypothesis Testing
After merging 2 datasets we can setup out hypothesis test. The null and alternative hypothesis can be defined
as follow:
For testing out hypothesis we used Pearson correlation test which measures a linear dependence
between two variables (x and y). It’s also known as a parametric correlation test because it depends
to the distribution of the data. The plot of y = f(x) is named the linear regression curve. The Pearson
correlation formula is as follow:
∑(𝑥 − 𝑚𝑥 )(𝑦 − 𝑚𝑦 )
𝑟=
2
√∑(𝑥 − 𝑚𝑥 )2 ∑(𝑦 − 𝑚𝑦 )
𝑟
𝑡= √𝑛 − 2
√1 − 𝑟 2
Now let’s take a look at the x-y plots in each city in Figure 3. We can see in these plots that property
price is increasing as the population grows up.
Results
For testing our hypothesis, we used cor.test function in R with Pearson method. The results for
different cities were as follow:
We can see that in all of cor.test’s results for different cities the alternative hypothesis is accepted
which conforms that the correlation between population and property price is not 0.
Conclusion
We have tested the hypothesis that the population and property price in cities of Ireland are
correlated. We use two datasets, one for population in 2006 and 2011 and the other for property
price. We could get more real results if we had the population information in all years from 1975
till 2015. As we didn’t have most of the years’ population we estimated the unknown populations
with a simple strategy. We proved the alternative hypothesis and observed that in all cities as
population grows up we have some raise in property price.