Question

Your team has developed certain presumption about factors influencing the price of a real estate: -

H1: The more bathrooms a house has, the higher is the price of the house. -

H2: The more bedrooms a house has, the higher is the price of the house. -

H3: The older the house is, the lower is the price of a house. -

H4: When the house has a garden, the price of the house is higher.

QUESTION: Provide an interpretation of the descriptive statistics of the variable “Price”. What do the different values say about the housing prices in NY? As your clients (the politicians) have very limited knowledge of statistics, write in full sentences and use your own language to explain the different values in a clear and understandable way (N, range, minimum, maximum, mean, standard deviation, skewness, kurtosis).

TABLE 1: OVERVIEW OF ALL USED VARIABLES Variable Variable description Measurement level Price of the House in US-Dollar Scale Price Bathrooms Number of Bathrooms in the house Scale Bedrooms Number of bedrooms in the house Scale Age of the house Scale Garden Dummy variable: Information ifScale the house has a garden (0 no arden, -gardern TABLE 2: DESCRIPTIVE STATISTICS OF ALL VARIABLES Descriptive Statistics Range Minimum Maximum Mean Std. Deviation Skewness Kurtosis Statistic Statistic Statistic StatisticStatistic Statistic StatisticStd. Error Statistic Std. Error 7158,347 150 Price 057 582843 16858 599701 167901,86 1,542 075 4,095 150 Number of Bathrooms 1057 502 2,106 1,24 075 4,424 3,18 Number of Bedrooms 1057 014 075 398 150 Number of Fireplaces 1057 62 550 316 075 185 30,409 2,104 Age of the House 1057 185 29,25 075 5,093 150 Garden 1057 08 278 2,999 7,007 075 Valid N (listwise) 1057

Answer 1

The value of N represents the number of houses in NY for which the prices are collected and it is equal to 1057. The value of Range means the difference between the maximum price of a house in NY and the minimum price of a house in NY which is equal to $582843 that means all the prices lies in this range. The minimum price is $16858 and the maximum price is $599701 that means the least price of a house in NY is $16858 and the greatest price of a house in NY is $599701. The mean price is $167901.86 that means all the prices are around $167901.86. The standard deviation of the price is $77158.358 that means on an average all the prices are $77158.358 far from the mean price. The skewness is 1.542 that means the distribution of prices is skewed towards the right side. The kurtosis is 4.095 that means the peakedness at the average price is high.