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    Statistics Assignment 1

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    Amit Mishra
    This document contains an assignment submission form for a student named Amit Mishra for the course "Statistical Methods for Management Decisions". It includes the student's name, student ID, and a signed statement agreeing to the program's honor code. The assignment asks the student to analyze data on home values in the local area and living area sizes, including creating summaries, checking distributions, and calculating probabilities based on distribution assumptions. The student provides numerical and graphical analyses to address the assignment questions.

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    Statistics Assignment 1

    Uploaded by

    Amit Mishra
    26 views4 pages
    This document contains an assignment submission form for a student named Amit Mishra for the course "Statistical Methods for Management Decisions". It includes the student's name, student ID, and a signed statement agreeing to the program's honor code. The assignment asks the student to analyze data on home values in the local area and living area sizes, including creating summaries, checking distributions, and calculating probabilities based on distribution assumptions. The student provides numerical and graphical analyses to address the assignment questions.

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    JMP assignment

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    This document contains an assignment submission form for a student named Amit Mishra for the course "Statistical Methods for Management Decisions". It includes the student's name, student ID, and a signed statement agreeing to the program's honor code. The assignment asks the student to analyze data on home values in the local area and living area sizes, including creating summaries, checking distributions, and calculating probabilities based on distribution assumptions. The student provides numerical and graphical analyses to address the assignment questions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    26 views4 pages

    Statistics Assignment 1

    Uploaded by

    Amit Mishra
    This document contains an assignment submission form for a student named Amit Mishra for the course "Statistical Methods for Management Decisions". It includes the student's name, student ID, and a signed statement agreeing to the program's honor code. The assignment asks the student to analyze data on home values in the local area and living area sizes, including creating summaries, checking distributions, and calculating probabilities based on distribution assumptions. The student provides numerical and graphical analyses to address the assignment questions.

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    © All Rights Reserved
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    ASSIGNMENT SUBMISSION FORM

    Course Name: Statistical Methods for Management Decisions


    Assignment Title: Assignment 1
    Submitted by: Amit Mishra

    (Student name or group name)

    Student Name PG ID
    Amit Mishra 62210088

    ISB Honour Code

    1. I will represent myself in a truthful manner.


    2. I will not fabricate or plagiarise any information with regard to the curriculum.
    3. I will not seek, receive, or obtain an unfair advantage over other students.
    4. I will not be a party to any violation of the ISB Honour Code.
    5. I will personally uphold and abide, in theory and practice, the values, purpose and rules of the ISB
    Honour Code.
    6. I will report all violations of the ISB Honour Code by members of the ISB community.
    7. I will respect the rights and property of all in the ISB community.
    8. I will abide by all the rules and regulations that are prescribed by ISB.
    1. Prepare a brief report summarizing the home values (prices) in this area. Use both graphical and
    numerical summaries. Your report should briefly describe what those summaries tell you, and
    anything of particular note/interest.

    • The mean from summary statistics is 163862.13

    • The standard deviation is 67651.559


    • The standard error in the mean (standard deviation of the sample population) = 2090.7614

    • There are outliers in the price towards the higher end.


    2. Does the normal model provide a good description of the prices? Use a Normal Quantile plot to
    frame your response.

    • The normal model does not provide good accountability of prices because:-

    • The normal quantile plot does not follow the straight line and is concave (shown via yellow line). It
    is skewed and it has a lot of outliers.

    • It is right-skewed, which can be validated by outliers towards the end .

    3. Irrespective of your response to Q2, assume that Price ~ N(164K, (68K)2). Given this:

    a. Calculate the following probabilities – P(Price > 92.8K), P(Price < 255.5K). Do these numbers
    agree with what you see in the data?

    P > 92.8k: P < 255.5K:


    Z Value = (x- μ) / σ Z Value = (x- μ) / σ
    = (92.8K- 164K) / 68K = (255.5K- 164K) / 68K
    = -1.047 = 1.345
    P (Z=~1.05) = 0.8531 P (Z=~1.34) = 0.9099

    b. Once again, assuming the above normal distribution, what percentage of houses should have a
    value less than 232K? Does that agree with the data?

    The number agrees with the data since it is around a smaller % than 255.5 K

    c. Based on the theoretical model, what do you expect should be the price of a house that is
    exactly on the 3rd quartile (75th percentile,). How does that compare to the actual?
    In a normal distribution, the 75th percentile should be 0.6745 toward the corresponding z-score. So,
    the corresponding price for Z-score 0.6745 =164000+68000*0.6745= 209,866.

    Therefore, to be exactly in the 3rd quartile (75th percentile), the price of the house should be
    209,866. In tune with the data given to us, the quartile of the 75th percentile is around 205,397.

    Hence, the estimated value is more than the real value and does not match the real value.

    4. Create a histogram and boxplot for the Living Area variable. Is the distribution symmetric?
    Check the skewness measure to see if it is consistent with your observation.
    The distribution is not symmetric and is inclined towards the right side and so it is right-skewed.
    Also, from the data, Skewness is 0.807 validates it.

    5. Create a new column in the dataset by taking the logarithm of the Living Area variable. Is the
    normal distribution a better fit for this variable or the original (Living Area) variable? Why do you
    think this is the case?

    It is visible that the skewness is tending to zero and the same is visible for the p-value too. So, the
    curve is normally distributed.

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