Thursday, June 7, 2012

Chapter 2 Project

Using the information from, the house I live in is now worth $282,000 when I first moved in at March, 2012 . To find the model, I type in #1-10 which represent years 2002-2011; then I put the past values from 2002 through 2011 in thousands of dollars as Y. Next, i tried all four regression models(Linear, Quadratic, Cubic, Quartic) to see which model fits the best, and it turns out that Quartic regression is most accurate because the r^2 is 0.9466850693, which is closer to 1 out of the other three. My Quartic regression equation is: y= .7152x^4 + -15.47^3 + 98.25x^2 + -165.46x + 393.75. This house will never reach the value of $100,000 because the minimum value is $247,000.

The prediction of the quartic model can change if the economy, neighborhood, or conditions of the house are bad. This would to lead to downfall in prices. 

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