As an independent statistical consultant, you have been contracted by Henry Oldman, a collector of grandfather clocks.
Question:
As an independent statistical consultant, you have been contracted by Henry Oldman, a collector of grandfather clocks. Mr Oldman has observed auction sales of 32 grandfather clocks, collecting data on:
The selling price (Price)
The age of the clock (Age)
The number of bidders on the clock (Bidders)
The quality of the clock (Quality: 1=good, 0=normal)
Mr Oldman is interested in selling three clocks from his collection:
Clock name | Age (years) | Expected bidders | Quality |
Masterton | 130 | 5 | Good |
Palmerston | 140 | 8 | Normal |
Halverson | 175 | 10 | Good |
He would like you to predict the selling price of each clock, and also to tell him whether you believe he should spend $200 to restore the Palmerston's clock condition from Normal to Good
Age | Bidders | Quality | Price |
127 | 13 | 1 | 1490 |
115 | 12 | 1 | 1270 |
127 | 7 | 1 | 1070 |
150 | 9 | 0 | 1520 |
156 | 6 | 0 | 1050 |
182 | 11 | 0 | 1980 |
156 | 12 | 0 | 1820 |
132 | 10 | 0 | 1250 |
137 | 9 | 0 | 1300 |
113 | 9 | 0 | 950 |
137 | 15 | 1 | 1880 |
117 | 11 | 1 | 1190 |
137 | 8 | 1 | 1320 |
153 | 6 | 1 | 1300 |
117 | 13 | 1 | 1370 |
126 | 10 | 0 | 1340 |
170 | 14 | 1 | 2310 |
182 | 8 | 1 | 1730 |
162 | 11 | 1 | 2040 |
184 | 10 | 0 | 2040 |
143 | 6 | 1 | 1020 |
159 | 9 | 1 | 1630 |
108 | 14 | 0 | 1060 |
175 | 8 | 1 | 1750 |
108 | 6 | 0 | 730 |
179 | 9 | 1 | 1930 |
111 | 15 | 0 | 1180 |
187 | 8 | 1 | 1760 |
111 | 7 | 1 | 1000 |
115 | 7 | 0 | 740 |
194 | 5 | 0 | 1360 |
168 | 7 | 1 | 1460 |
Required
Create box-and-whisker and scatter plots (as appropriate) to show how each of the x-variables affects the price of the clocks.
Create a multiple regression model for price using all three x-variables.
Interpret the parameter estimates.
Predict the price of each of Mr Oldman's three clocks. Provide the most likely selling price, along with a 95% prediction interval. Tell Mr Oldman how to interpret the 95% prediction interval.
Decide (using your model) whether spending $200 to upgrade the Palmerston clock from Normal to Good quality is worthwhile (i.e. can be expected to earn more than $200 back at auction).
Organizational Behavior
ISBN: 9780077379438
5th Edition
Authors: Steven L. McShane, Mary Ann Von Glinow