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Marketing Research

Problem set 2 Spring 2024

[Total: 40 points]

Please download the housing dataset (from Latte) for your analysis.

1) Below are data for 40 houses located in one of two neighborhoods (A or B).

(This data is also provided in an Excel spreadsheet on the website for the class. Open the data in Excel and conduct the analyses required to answer the questions. Be sure to paste output (i.e., tables) from Excel into your answers where that is requested or else you will lose points.)

a) Give appropriate summary statistics (one measure of central tendency and one measure of variation) for each of the 3 variables Appraised Land Value, Appraised Value of Improvements, and Sale Price, calculated separately for neighborhoods A and B. Important: PROVIDE ONLY ONE (APPROPRIATE) CENTRAL TENDENCY MEASURE AND ONE (APPROPRIATE) MEASURE OF VARIATION FOR EACH VARIABLE FOR EACH NEIGHBORHOOD. [I suggest that you write your answers in a table or you cut and paste into word. If you use Descriptive Statistics in the Data analysis Tool in Excel to calculate summary statistics, you shouldn’t give the whole Excel output as you will end up providing too many measures of central tendency and variation.] [6 points]

b) Based on this data sample, do neighborhoods A and B differ in the number of houses with and without yards? In your answer be sure to calculate an appropriate statistic, state the result of the test, and state your conclusion. (Paste your output from Excel for the statistical test that you do in your answer, as well as stating your conclusion and writing out the appropriate statistic that supports your conclusion.) [6 points]

c) Based on this data sample, do houses in neighborhoods A and B have different sale prices? (In your answer be sure to calculate an appropriate statistic, state the result of the test and state your conclusion.) (Paste the output from Excel for the statistical test that you do in your answer, as well as stating your conclusion and writing out the appropriate statistic that supports your conclusion.) [6 points]

d) Provide a correlation matrix (paste the output from Excel) for Appraised Land Value, Appraised Value of Improvements and Sale Price. Also calculate the significance of each correlation. In words, explain the meaning of the correlation between Sale price and Appraised Land Value and the meaning of the correlation between Appraised Land Value and Appraised Value of Improvements. [6 points]

e) Imagine you are interested in the relationship between house Sale price and Appraised Land Value while controlling for any effects of Appraised Value of Improvements (use Sale price as the Y variable). Conduct a linear regression that allows you to test this relationship (using data for all the houses, i.e., from both neighborhoods). State your conclusion about the relationship, and provide the statistics that support your conclusion. (Paste your Excel output for this regression into your answer.) [6 points]

f) Imagine you are interested in the relationship between house Sale price and Neighborhood, while controlling for any effects of Appraised Land Value and Appraised Value of Improvements on Sale price. Conduct a linear regression that allows you to test this relationship. State your conclusion about the relationship, and provide the statistics that support your conclusion. (Paste your Excel output for this regression into your answer.) [6 points]

g) Looking at your answers to parts d, e, and f above, do you think you have any multicollinearity concerns for your two regressions? Why or why not? [4 points]