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Sampada Soni - 62310151

This document appears to be an assignment submitted by Sampada Soni. It addresses 4 questions regarding statistical modeling and decision making. Specifically, it interprets confidence intervals at the 90%, 95%, and 99% levels based on home price data. It also uses the 95% confidence interval to determine the 95th percentile home price and makes assumptions about the normal distribution of home prices over time. Finally, it calculates the population proportion of "old" homes using a conditional formula and generates 95% and 99% confidence intervals for this proportion.

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34 views3 pages

Sampada Soni - 62310151

This document appears to be an assignment submitted by Sampada Soni. It addresses 4 questions regarding statistical modeling and decision making. Specifically, it interprets confidence intervals at the 90%, 95%, and 99% levels based on home price data. It also uses the 95% confidence interval to determine the 95th percentile home price and makes assumptions about the normal distribution of home prices over time. Finally, it calculates the population proportion of "old" homes using a conditional formula and generates 95% and 99% confidence intervals for this proportion.

Uploaded by

Sampada Soni
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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____Statistical Modelling for Decision Making_________

__Assignment 2________________
_____Sampada Soni __________

Sampada Soni 62310151


Q1
1. From the Confidence Interval table, we can interpret that the Upper CI-167304.2 and
lower CI-160420.1 values indicate that about 90% of all random samples from this
population would result in a 90% confidence interval that includes the population mean
number of home prices.
2. From the Confidence Interval table, we can interpret that the Upper CI-167964.7 and
lower CI-159759.6.1 values indicate that about 95% of all random samples from this
population would result in a 95% confidence interval that includes the population mean
number of home prices.
3. From the Confidence Interval table, we can interpret that the Upper CI- 169257.4and
lower CI-158466.8 values indicate that about 99% of all random samples from this
population would result in a 99% confidence interval that includes the population mean
number of home prices.
The margin of error is increasing as the confidence interval increasing, as can be observed when
we look at the margin of error for a CI of 90% vs the CI of 95%. This helps us in being more
accurate/precise in our estimates.
The conditions necessary for creating a random- The assumption here is that the sample is a
random sample created through SRS and is representative of the population. Also, the sample
size of 1047 is sufficiently large to satisfy the Central Limit Theorem, this helps in making
accurate estimates about the population. Additionally, the standard deviation of the sample is
also known to us that helps in calculating the CI.
Q2. To find the 95th percentile of home prices in the market we will use the CI of 90% and refer
to the upper CI value of 90% i.e. 167304.2. This value gives us the 95th percentile of home prices.
Q3. Assuming that the house prices don’t go up or down over time, we can expect the
distribution to follow a normal distribution. The data consists of average sales prices over
several years, so we can interpret that the sample distribution of the mean would be normally
distributed. This follows the Central Limit Theorem. The current sample at hand also follows the
CLT. Since the house prices are assumed to be constant, the mean and standard deviation must
also be constant over time which are- Mean (163862.13) and Standard Deviation (67651.559).

Q4. To find out the population proportion, column 8 was created with a conditional formula
that had values:
If Age>30, then 1
Or else 0
This yields the population proportion of 0.288443. Through this we can interpret that 28.8% of
the houses are old. Then we generated a histogram and created the 95% and 99% confidence
intervals for this proportion of old houses in the region. Applying CLT, we can conclude:
A) For 95% Confidence Interval- We are 95% confident that population proportion of old
houses lies in the range- 0.260957-0.31593
B) For 99% Confidence Interval- We are 99% confident that population proportion of old
houses lies in the range- 0.252296-0.324591

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