Assignment: Data Mining
You will be using the Real Estate data set to build a model to predict what a house should sell for. This model will be used by a real estate agency to help their clients understand what their house should sell for so they can make an educated decision about listing price. Secondarily, the model will be used by a home contractor. S/he would like to be able to tell clients the selling value of adding an additional bathroom.
You completed the first 3 steps in the data mining process. For this assignment you will be completing the last two steps: Model and Assess.
• Briefly recap the dummy coding and missing value decisions you made in Part 1.
• Prepare a professionally formatted correlation table in a separate tab/worksheet.
o What is multicollinearity? Do you need to address it? If so, how?
o Discuss which variables have the best correlation with price
• Run a regression and discuss the results
o Is the model significant?
o How much of rice is explained by the independent variables?
o What is the model?
o Are all of the independent variables significant? Discuss.
o What factors have the largest impact on home selling price?
o How much does a bathroom add to the value of a home?
• Run another regression (change some independent variables or change the sample of data) and discuss the results
• You have been provided with the listing info and selling price on 2 houses that were not in your original sample. Please use both models to predict the selling price for these 2 homes.
o How accurate is your model? Please calculate your accuracy percentage as (predicted price - actual price)/actual price
o Which model is better? Why?
• If you had the time, money, expertise, etc. what would you have done differently and why?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.