Auto Analysis Page 1

Automobile Analysis

Cleary University
December 23, 2007 Version 3
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Introduction
On December 14, 2007, the average price for a gallon of gasoline in Michigan
was $3.008 per gallon (Regular, 2007). The high gas prices are weighing heavily on
consumers and are taken into account for a new vehicle purchase. Several factors, such
as weight of the vehicle and horsepower, will affect gas mileage. These two factors
should play a role in choosing a new vehicle if the consumer is concerned about gas
mileage. Sport utility vehicles (SUV) are obviously heavier than a non-sport utility
vehicle referred to as “cars” in this report. However, many consumers like the
advantages of an SUV including cargo and passenger space as well as an option of four-
wheel drive.
The purpose of this report is to analyze the affects of weight, horsepower and the
type of vehicle on gas mileage using descriptive statistics, confidence intervals, and
dummy variable analysis in order to provide consumers with as much information as
possible prior to a new vehicle purchase. This report is organized as follows: data
description, confidence intervals, and dummy variable analysis. All tables referenced can
be found in Appendix A on page 7.

Data Description
The automotive data set, collected in 2002, includes information on 121
automobiles, both domestic and foreign, and includes SUV’s and cars. The variables
include classification into a category of SUV or car, horsepower, fuel type, miles per
gallon, cargo volume, turning circle, and length, weight, and width of the vehicle.
Car and Driver defines horsepower as the power needed to lift 550 pounds one
foot off the ground in one second (Definitions, 2007). This is a common unit of an
engine’s power. Weight is measured in pounds and gas mileage is measured by miles
per gallon. The turning circle is a measurement of how tight a turn a vehicle can
perform; it is measured in feet. For a vehicle with a 16 foot turning radius, a U-turn
could be made in 32 feet (Glossary, 2007).
Cargo volume is measured in cubic foot. Length and width are measured in
inches. Fuel type is classified as regular or premium. Drive type fits one of four
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categories: front wheel drive, rear wheel drive, all wheel drive, and permanent four
wheel drive.

Descriptive Statistics
The dataset was broken into two groups, SUV versus cars for comparison. Please
refer to tables 1, 2, and 3 in Appendix A for descriptive statistics of each group. The data
contained thirty-one SUVs and ninety cars. The SUV group showed a higher horsepower
overall but lower gas mileage. However, both groups showed a great deal of variance in
horsepower including SUV’s with horsepower lower than that of the average car.
Overall average gas mileage is 20 miles per gallon with the car group averaging 2
miles per gallon higher at 22. As with horsepower, the data showed great variance
including cars getting as much as 41 miles per gallon and SUV’s getting as little as 10
miles per gallon.
Average cargo volume was nearly doubled in the SUV category although both
groups had a very wide range of cargo volumes including the lowest at 5 and the highest
at 84. The overall average cargo volume is 27.5. There is little variation in the turning
circle of either group with both groups falling close to the overall average of 40.
Surprisingly, the length and width of both groups differed little from the overall
average with little variance and range of each. Weight, on average, is approximately
1000 pounds higher for the SUV group than for the car group. However, there is a great
deal of variance in the weight of both groups showing a low of 2150 pounds and a high of
7270 pounds with an overall average of 3616 pounds.
Although SUVs have higher horsepower and cargo volume than cars, the obvious
advantage of a car is higher gas mileage. .

Confidence Intervals
Confidence intervals were calculated on the mean weight, horsepower, and miles
per gallon using a 95% interval. Please refer to Table 4 in Appendix A. Interestingly, the
confidence interval for miles per gallon is very narrow with 1 mile per gallon on either
side of the overall average again showing very little variance from the average. The data
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also shows with 95% confidence that the average weight of a vehicle in the data set is
between 3486 pounds and 3745 pounds with horsepower averaging between 170 and 187.

Regression Analysis
Based on the two categories of SUV and cars, a regression analysis was
performed including a dummy variable to test the hypothesis that a strong relationship
exists between horsepower or weight on miles per gallon. To further test the theory, a
dummy variable was added to separate the data into the two groups of SUV and cars. It
is assumed that weight will affect miles per gallon based on the fact that a heavier vehicle
will require more fuel to travel the same distance as a lighter vehicle. In a similar
manner, horsepower will also affect fuel mileage as higher horsepower is expected to
require more fuel for the extra power produced. Please refer to Table 5 for regression
results. Additional variables such as length and width were not included in this regression
because there is little variance for either the SUV or car group from the average for both
variables. Therefore, adding these variables to the regression would not show a
significant difference between the groups.
As noted in the Regression Statistics of the regression results table, the R Square
value of 0.64 indicates that only 64% of the variance in gas mileage can be explained by
weight and horsepower. In other words, there may be additional variables that affect gas
mileage. However, adding additional variables such as length and width to the regression
do not improve the R Square value. Other factors such as gearing in the transmission,
including overdrive, and overall design of the vehicle including aerodynamics may affect
gas mileage. However, these variables are not included in the dataset for analysis.
The F-Ratio and Significance F, located in the ANOVA section of the regression
results table indicate that at least one of the independent variables, horsepower or weight,
is significantly correlated to miles per gallon. This value means that the rest of analysis
is worth taking a closer look at.
As noted by Chart 1 in Appendix A, the miles per gallon for a vehicle decrease as
weight increases. The weight coefficient of -0.0035 also reinforces that this relationship
has a negative slope. There are a few outliers in the lower and upper values of x as well.
These can be accounted for in the larger SUV’s such as the Ford Excursion and the GMC
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Yukon XL; both are extended cab vehicles allowing for carrying extra passengers. On
the low end are compact cars with little cargo space compared to the average.
As expected, gas mileage decreases more for an SUV than for a car based on
weight. As noted above in the descriptive statistics, the average weight of an SUV is
1000 pounds more than that of a car. The dummy variable, D-SUV, displays a
coefficient of -2.29 which means that for each additional one-thousand pounds of weight,
gas mileage will decrease by 2.29 miles per gallon in the SUV group. In addition, the
regression results show that there is a significant relationship at the 97% confidence level
between weight and miles per gallon.
The regression results for horsepower are very similar to those of weight. Again,
there is a significant relationship between horsepower and miles per gallon at the 97%
confidence level. Again, there is a negative relationship between horsepower and miles
per gallon as noted by the slope of the line in CHART 2 as well as the horsepower
coefficient of -0.020 in Table 5. This means that for each unit increase in horsepower,
there is a decrease of 0.02 miles per gallon. This value decreases more dramatically for
the SUV group by a factor of -2.29.
Similar to weight, there are a few outliers on the lower end of the horsepower data
in the overall data set. Please refer to Chart 4. Interestingly, these are not the same
vehicles that caused outliers in the weight data. One in particular is a hybrid, Toyota
Prius, which has a very low horsepower of 70 and very high gas mileage of 41 miles per
gallon. The other two outliers are manufactured by Toyota and Volkswagon.

Conclusion
The analysis clearly shows a strong relationship between vehicle weight and
horsepower on gas mileage. Consumers who are concerned about gas mileage should
consider a lighter and less powerful vehicle to maximize gas mileage. However, given
the fact that the Midwest gets a fair share of bad weather, including snow and ice, a sport
utility vehicle is certainly not out of the running for a new vehicle purchase.
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References
Definitions. (n.d.). Car and Driver. Retrieved December 16, 2007, from
http://www.caranddriver.com
Glossary. (n.d.). Wise Geek. Retrieved December 16, 2007, from
http://www.caranddriver.com/‌glossary/‌4534/‌caranddrivercom-glossary-of-
terms.html
Kilbanoff, P., Sandroni, A., Moselle, B., & Saraniti, B. (2006). Managerial Statistics.
USA: Thomson South-Western.
Regular Gasoline Average Prices for Michigan. (n.d.). GasBuddy. Retrieved December
14, 2007, from http://www.gasbuddy.com
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Appendix A

Table 1: Descriptive Statistics of 121 Foreign and Domestic Vehicles

Results show descriptive statistics for each variable. Specifically, the variables located in the
columns include horsepower, miles per gallon, length, weight, cargo volume, turning circle, and
width. The rows include the following descriptive statistics: Mean, standard error, median,
mode, standard deviation, sample variance, kurtosis, skewness, range, minimum, maximum, sum
and count.

Horsepowe Cargo Turning

Overall r MPG Length Weight Volume Circle Width
Miles
per
Units * gallon Inches Inches Cubic foot Feet Inches
Mean 179.13 20.70 187.19 3616.07 27.51 39.93 71.34
Standard Error 4.21 0.43 1.20 65.26 1.73 0.25 0.29
Median 175.00 21.00 187.00 3530.00 18.00 40.00 71.00
Mode 220.00 21.00 201.00 3640.00 14.00 40.00 72.00
Standard Dev. 46.28 4.68 13.19 717.87 19.04 2.77 3.23
Sample Variance 2141.52 21.89 173.94 515343.00 362.63 7.67 10.43
Kurtosis -0.47 5.88 0.23 5.22 0.89 2.47 -0.03
Skewness 0.20 1.65 0.26 1.44 1.32 0.70 0.57
Range 215.00 31.00 72.00 5120.00 79.00 19.00 15.00
Minimum 70.00 10.00 155.00 2150.00 5.00 33.00 65.00
Maximum 285.00 41.00 227.00 7270.00 84.00 52.00 80.00
Sum 21675.00 2505.00 22650.00 437545.00 3328.50 4831.00 8632.00
Count 121.00 121.00 121.00 121.00 121.00 121.00 121.00
*Horsepower is a unit of the engines power measured as the amount of power needed to lift 550
pounds one foot off the ground in one second

Data Source: Autodata2002.xls

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Table 2: Descriptive Statistics of 31 Sport Utility Vehicles

Results show descriptive statistics for each variable for the Sport Utility Vehicles included in the
dataset. Specifically, the variables located in the columns include horsepower, miles per gallon,
length, weight, cargo volume, turning circle, and width. The rows include the following
descriptive statistics: Mean, standard error, median, mode, standard deviation, sample variance,
kurtosis, skewness, range, minimum, maximum, sum and count.

Horsepowe Cargo Turning

SUV r MPG Length Weight Volume Circle Width
Miles
per
Units * gallon Inches Inches Cubic foot Feet Inches
Mean 191.68 16.48 184.90 4267.42 42.35 40.58 72.32
Standard Error 9.16 0.48 2.60 158.94 2.43 0.60 0.60
Median 185.00 16.00 183.00 4135.00 37.50 40.00 72.00
Mode 127.00 15.00 184.00 5590.00 33.50 40.00 72.00
Standard Dev. 51.02 2.69 14.48 884.92 13.56 3.36 3.33
Sample Variance 2602.69 7.26 209.56 783086.45 183.75 11.32 11.09
Kurtosis -1.12 0.05 2.59 3.14 3.95 3.51 0.08
Skewness 0.36 0.01 1.49 1.34 2.05 1.71 0.64
Range 158.00 12.00 64.00 4215.00 56.00 15.00 13.00
Minimum 127.00 10.00 163.00 3055.00 28.00 37.00 67.00
Maximum 285.00 22.00 227.00 7270.00 84.00 52.00 80.00
Sum 5942.00 511.00 5732.00 132290.00 1313.00 1258.00 2242.00
Count 31.00 31.00 31.00 31.00 31.00 31.00 31.00
*Horsepower is a unit of the engines power measured as the amount of power needed to lift 550
pounds one foot off the ground in one second

Data Source: Autodata2002.xls

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Table 3: Descriptive Statistics of 90 Cars

Results show descriptive statistics for each variable for the Cars included in the dataset.
Specifically, the variables located in the columns include horsepower, miles per gallon, length,
weight, cargo volume, turning circle, and width. The rows include the following descriptive
statistics: Mean, standard error, median, mode, standard deviation, sample variance, kurtosis,
skewness, range, minimum, maximum, sum and count.

Horsepowe Cargo Turning

Car r MPG Length Weight Volume Circle Width
Miles
per
Units * gallon Inches Inches Cubic foot Feet Inches
Mean 174.81 22.16 187.98 3391.72 22.39 39.70 71.00
Standard Error 4.64 0.46 1.34 50.79 1.90 0.27 0.33
Median 170.00 21.00 189.00 3427.50 15.00 40.00 71.00
Mode 220.00 21.00 201.00 3990.00 14.00 40.00 68.00
Standard Dev. 44.00 4.33 12.71 481.88 17.99 2.51 3.14
Sample Variance 1936.42 18.74 161.44 232210.76 323.78 6.32 9.87
Kurtosis -0.40 8.17 -0.29 -0.51 2.97 -0.24 -0.10
Skewness 0.03 2.48 -0.26 -0.30 2.06 -0.27 0.56
Range 205.00 24.00 60.00 2165.00 70.50 12.00 14.00
Minimum 70.00 17.00 155.00 2150.00 5.00 33.00 65.00
Maximum 275.00 41.00 215.00 4315.00 75.50 45.00 79.00
Sum 15733.00 1994.00 16918.00 305255.00 2015.50 3573.00 6390.00
Count 90.00 90.00 90.00 90.00 90.00 90.00 90.00
*Horsepower is a unit of the engines power measured as the amount of power needed to lift 550
pounds one foot off the ground in one second

Data Source: Autodata2002.xls

Table 4: 95% Confidence Intervals

Results for 95% Confidence Intervals of Weight, Horsepower, and Miles per Gallon for all 121
vehicles included in the dataset. Results show little variance for miles per gallon and a small
range around the average for both weight and horsepower.

Weight Horsepower MPG

Lower Level 3486.861701 170.8027575 19.86026959
Upper Level 3745.287059 187.4617053 21.54468908
Data Source: Autodata2002.xls
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Table 5: Multiple Regression Results

Table shows multiple regression results utilizing Miles per Gallon as dependent variable and
Horsepower, Weight, and Dummy SUV as independent Variables. Significance F indicates the
results are significant with at least one variable correlated to miles per gallon. All independent
variables are significantly related to miles per gallon as noted by P-Value. However, the
independent variables only account for 64% of the variance in miles per gallon indicating that
there are other variables not included in this regression that affect gas mileage.

Regression Statistics
Multiple R 0.805438893
R Square 0.64873181
Adjusted R
Square 0.639724933
Standard Error 2.808538784
Observations 121

ANOVA
  df SS MS F Significance F
Regression 3 1704.406114 568.1353715 72.0262788 1.84785E-26
Residual 117 922.8831417 7.8878901
Total 120 2627.289256      

Standard Lower Upper

  Coefficients Error t Stat P-value Lower 95% Upper 95% 99.0% 99.0%
Intercept 37.45333038 1.464299919 25.57763604 9.79691E-50 34.55336134 40.3532994 33.6190493 41.2876114
Horsepower -0.020296546 0.007910798 -2.565676345 0.01156089 -0.035963465 -0.00462962 -0.04101103 0.00041794
Weight -0.003464232 0.000595725 -5.815155421 5.36344E-08 -0.004644034 -0.00228443 -0.00502414 -0.00190432
D-SUV -2.295738658 0.73070478 -3.141814207 0.002127097 -3.742861076 -0.8486162 -4.20909497 -0.38238234

Data Source: Autodata2002.xls

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Chart 1: Weight versus Miles per Gallon

Chart indicates a negative relationship between weight and miles per gallon for all 121 vehicles
included in the dataset. The equation for the slope of the line is y = 37.45-0.0035*(Weight)
indicating that for each 1000 pound increase in weight, gas mileage decreases by 0.0035 miles
per gallon.

Weight versus Miles Per Gallon

50
40
30 MPG
MPG

Predicted MPG
20
Linear (MPG)
10
0
0 5000 10000
Weight
Data Source: Autodata2002.xls
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Chart 2: Horsepower versus Miles per Gallon

Chart indicates a negative relationship between horsepower and miles per gallon for all 121
vehicles included in the dataset. The equation for the slope of the line is y = 37.45-
0.020*(Horsepower) indicating that for each unit increase in horsepower, gas mileage decreases
by 0.020 miles per gallon.

Horsepower versus Miles per Gallon

50
40
MPG

30 MPG
20 Predicted MPG
Linear (MPG)
10
0
0 100 200 300
Horsepower
Data Source: Autodata2002.xls