Assignment Task II

Task 2

Bu
ildi
ng
Ty
pe
s Count of V4
Bri
ck 16
Bri
ck
Ve
ne
er 17
W
ea
th
er
bo
ar
d 12
Va
ca
nt
lan
d 5
Gr
an
d
To
tal 50
 Frequency Column Chart for Building Type
18
16
14
12
10
8
6
4
2
0
Brick Brick Veneer Weatherboard Vacant land

Frequency Column Chart for Building Type

5; 10%

16; 32%

12; 24%

17; 34%

Brick Brick Veneer Weatherboard Vacant land

a) 16 properties in my sample consists of brick buildings.

b) Brick Veneer occurs most frequently in my sample. It occurs 17 times.
c) 24% proportion of properties in my sample consists of weatherboard buildings.

Task 3

a) Sold Price Data

V7
132
152
265
 317
319
348
351
361
379
400
409
410
415
420.5
450
462
465
481.5
490
491
501
505
510
542
555
600
610
621
627.5
631
633
670
671.5
705
715
718
775
782
845
865
900
936
1010
1070
1424
 b)
I. Here,
P
L P = (n + 1)
100
For 70th percentile,
L70 = (45+1) *70/100
= 46*0.7
= 32.2nd item ~ 32nd item = 670
The 70th percentile of this data is $670,000.

II. We know,
First quartile = 25th percentile = (45+1) *25/100 = 46*0.25 = 11.5 th item = 12th
item = 410
The first quartile of this data is $410,000.

Third quartile = 75th percentile = (45+1) *75/100 = 46*0.75 = 34.5 th item = 35th
item = 715
The third quartile of this data is $715,000.

c) The 70th percentile informs us that the 70% of the property were sold for less than or
equal to $670,000 and 30% of the property were sold for more than $670,000.

d) We know,

IQR = 3rd quartile – 1st quartile = $715,000 - $410,000 = $305,000.

It tells us that the middle 50% of this data or the total difference between first
quartile and third quartile of the data is $305,000.

Task 4

a)
Descriptive Summary Statistics of Sold Price

Mean 576.4444444
Standard Error 37.08466365
Median 510
 Mode #N/A
Standard Deviation 248.7714866
Sample Variance 61887.25253
Kurtosis 1.942982346
Skewness 1.0191566
Range 1292
Minimum 132
Maximum 1424
Sum 25940
Count 45

b) We know,
IFLL = Q1 – 1.5* IQR
= $410,000 – 1.5* $305,000
= -$47,500
IFUL = Q3 + 1.5* IQR
= $715,000 + 1.5* $305,000
= $1,172,500
c)
i. Median is an appropriate measure of central tendency.
ii. Interquartile range is an appropriate measure of dispersion.

The reasoning behind the choice in both cases are since IFUL is greater than the
maximum value and IFLL is less than the minimum value.

Task 5
a) Three pieces of evidence that indicate whether the data “Sold Price” has not been
obtained from a normally distributed population or not are:
i. Mean, median and mode should be equal.
ii. Skewness should be equal to 0.
iii. Histogram should be symmetrical.

These data are not obtained from normally distributed population, as we can see
from the descriptive statistics table, because,

i. Mean, median and mode are not equal.

ii. Skewness is not equal to 0

iii.
Sold Price Frequency
300 3
800 35
1300 6
1800 1
 Histogram for Sold Price
40
30
Frequency

20
10
0
300 800 1300 1800
Sold Price

Frequency

Here, we can see that the histogram is not symmetrical and is positively skewed.
Thus, the data “Sold Price” is not normally distributed.

b) Here,
P (-1.5  z  1.5)
= P [ z (1.5) – z (-1.5)]
= P (0.9332 – 0.0668)
= 0.8664
Hence, number of “Sold Price” observations in my sample are:
0.8664*n (n= data count)
= 0.8664* 45
= 38.988  39
39 observations from my sample data lies within 1.5 standard deviation of the mean.

c) From descriptive table,

 = 576.4
 = 248.77
z = 1.5
so, Lower limit =  - 1.5*
= 576.4 – 1.5* 248.77
= 203.245

Upper limit =  + 1.5*

= 576.4 + 1.5* 248.77
= 949.55
By manually counting the number of observation in the bound is 43.
Hence, the count doesn’t match with the count observed from (b).
Therefore, it confirms the conclusion in (a) that the data is not normally distributed.

Task 6
 a)
Descriptive summary statistics for Sold Price

Mean 576.4444444
Standard Error 37.08466365
Median 510
Mode #N/A
Standard Deviation 248.7714866
Sample Variance 61887.25253
Kurtosis 1.942982346
Skewness 1.0191566
Range 1292
Minimum 132
Maximum 1424
Sum 25940
Count 45
Confidence Level(90.0%) 62.31076354

i) Here,
Point estimate ()  Mean (x̄) = 576.44
Hence, the point estimate of the data is 576.44.

ii) For 90% confidence interval,

x̄-e <  < x̄+e

= 576.44-62.31 <  < 576.44+62.31

= 514.13 <  < 638.75

iii) So, with 90% confidence the population mean sold price lies between $514,130 and

$638,750, or symbolically; with 90% confidence 514.13 <  < 638.75 ($000).

Precision (or accuracy) of this data = $124,620.

b) The interval estimate would not be satisfactory if the population mean “Sold Price” is

actually $650,000 because it does not lie between the confidence interval.

Task 7

a)

Descriptive summary statistics for Brick Veener

 Mean 0.34
Standard Error 0.067672682
Median 0
Mode 0
Standard Deviation 0.478518121
Sample Variance 0.228979592
Kurtosis -1.579626048
Skewness 0.696595006
Range 1
Minimum 0
Maximum 1
Sum 17
Count 50
Confidence Level(99.0%) 0.181359537

i) Here,
Point estimate (π)  Mean () = 0.34
Hence, the point estimate of the brick veneer properties is 0.34.

ii) For 99% confidence interval,

-e  π  +e
= 0.34-0.18  π  0.34+0.18
= 0.16  π  0.52
Precision = 0.52 – 0.16
= 0.36

b)

Descriptive Statistics of Brick Veener

Mean 0.34
Standard Error 0.067672682
Median 0
Mode 0
Standard Deviation 0.478518121
Sample Variance 0.228979592
Kurtosis -1.579626048
Skewness 0.696595006
Range 1
Minimum 0
Maximum 1
Sum 17
Count 50
Confidence Level(95.0%) 0.135993345

From the above table, Point estimate (π)  Mean () = 0.34
Using rule of thumb for 95% confidence interval,
  Zα/2 * (standard error)
= 0.34  Z(0.025) * 0.068
= 0.34  1.96 * 0.068
= (0.34 – 0.13) to (0.34 + 0.13)
= 0.21 to 0.47
By Thumb Rule 95% confidence level is 0.21  π  0.47.
Precision = 0.47 – 0.21 = 0.26

Now using the Empirical rule for 95% confidence interval,

  2
= 0.34  2*0.48
= (0.34 – 0.96) to (0.34 + 0.96)
= -0.62 to 1.3

Therefore by Empirical Rule, -0.62  π  n1.3

c) We can see that the precision calculated from (b) 0.26 differs from the precision
calculated in (a) 0.36. This is because there is a change in confidence level from 95%
to 99% which creates the change in direction in precision.