1 / 15

Factors Determining the Price Of Used Mid-Compact Size Vehicles

Factors Determining the Price Of Used Mid-Compact Size Vehicles. Team 4. INTRODUCTION. Used least squares regression analysis to determine the factors that affect mid-compact size vehicle price.

brittany-perez
Download Presentation

Factors Determining the Price Of Used Mid-Compact Size Vehicles

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Factors Determining the Price Of Used Mid-Compact Size Vehicles Team 4

  2. INTRODUCTION • Used least squares regression analysis to determine the factors that affect mid-compact size vehicle price. • By determining these factors manufacturers, dealerships, rental agencies, and consumers can incorporate these economic indicators into their decision making processes and operations What? Why?

  3. How? • Identified and defined dependent variable (Price of Mid-Compact Size Cars) • Collected sufficient data on potential indicators/independent variables • Developed regression model by considering different model types and variable interactions • Diagnosed and refined model taking into consideration performance parameters

  4. Independent Variables • Supply- Used cars available in a particular month • Fleet - Percentage of supply of vehicles sold to public agencies (police department, government offices) • Lease- Percentage of total supply of cars leased. • Incentives - Rebates, APR, etc. dollar value($) • PI - MonthlyNational Personal Income in Billions of dollars • Month - Month in which Price was recorded. • Year -Year in which Price was recorded.

  5. Single Variable Regressions Y=.0557x+6046.7 R^2=.1743 Y=-4031.1x+7730.3 R^2=.3143 Y=-.7584x+7895.1 R^2=.3742 Y=4850.4.4x+6088.3 R^2=.2421

  6. Y=-69.184x+7326 R^2=.0491 Y=-98.334x+7136.3 R^2=.0163

  7. Correlation Matrix • By looking at the Correlation Matrix we see some fairly high correlations between independent variables and that indicates a potential problem with multicollinearity

  8. Developing Models (EQ 1)

  9. Developing Models (EQ 2)

  10. Testing Variable Interactions Price Vs Year*Supply Y=.0071x+6517.7 R^2=.0548 Price Vs Incentive*Fleet Y=-1.8835x+7533.3 R^2=.3377

  11. Developing Models (EQ 3)

  12. Final Model

  13. Diagnostics

  14. Final Equation PRICE = -0.06417398414*SUPPLY - 57.89403046*MONTH - 498.984817*YEAR + 5495.168601*LEASE - 0.9477265548*INCENTIVE - 4523.030592*FLEET + 0.02838232606*(YEAR*SUPPLY) + 2.314465082*(INCENTIVE*FLEET) + 9055.90772 dPrice/dSupply= -.064+.028(Year) dPrice/dIncentive= -.9477+2.31(Fleet) dPrice/dMonth= -57.89 dPrice/dFleet= -4523.03+2.31(Incentive) dPrice/dYear= -498.98 + .028(Supply) dPrice/dLease= 5495.17

  15. Conclusions • The month and lease % variables have the most significant impact on price. • The effect of incentives on price cannot be considered without looking at fleet % • The effect of supply on price also cannot be considered without looking at year • An informed buyer or seller of mid-compact sized vehicles should consider these implications before acting

More Related