The factors that affect the selling price
The research was conducted in order to determine the factors that affect the selling price of Ford Mustang. In addition, the research was conducted to create a model that will predict the selling price of Ford Mustang. The test was conducted with a sample of 35 Ford Mustang cars and its corresponding car data. The analysis was done with the use of independent samples t-test and one-way analysis of variance to determine differences in the mean selling price between different categories.
On the other hand, multiple regression analysis was conducted to determine the factors that affect the selling price of Ford Mustang and to create a model that will predict the selling price of the Ford Mustang. After conducting the analysis, the researcher has found out several significant results. The researcher found out that there is a significant difference in selling price between convertible and non-convertible Ford Mustangs (t = -2. 41 p = 0. 0216) and in the selling price between GT model Ford Mustangs and non-GT model Ford Mustangs (t = -2. 30 p = 0. 0279).
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The researcher also found out convertibility (t = 6. 839 p < 0. 001), age (t = -9. 597 p < 0. 001) and GT type (t = 5. 525 p < 0. 001) of the Ford Mustang affects the selling price of the car. And lastly, the researcher created a significant model that can predict the selling price of the Ford Mustang (F = 53. 35 p < 0. 001). Introduction Background of the Problem Ford is a motor company in the United States. One of the main products of Ford Motors is the Ford Mustang. Although the car is already popular, the company still wants to determine the factors that affect the selling price of Ford Mustang.
The company wants to determine such factors in order to fully utilize the marketability and profits with the sales of Ford Mustang. In addition, the company wants to develop a model that will predict the price of Ford Mustang cars. Research Questions In order to determine such factors that affect the selling price of the Ford Mustang, the researcher formulated several questions that will be used as guide in order to solve the problem. The main concern of the researcher is to determine the factors that affect the selling price of the Ford Mustang and to create a model that will predict the selling price of the Ford Mustang.
To answer this concern, the researcher formulated the following research questions. • Is there a difference in the selling price between the categories in the following factors: a. Convertible Ford Mustangs and non-convertible Ford Mustangs b. Transmission type c. Air-conditioned and non-air-conditioned. d. GT and non-GT model. e. Ownership of the car. • Is there a difference in the selling price between the different colors of Ford Mustang? Using the above questions, the researcher came up with different hypotheses match for every question the researcher has formulated.
The following are the hypotheses of the research. • There is no difference in the selling price between the categories in the following factors: a. Convertible Ford Mustangs and non-convertible Ford Mustangs b. Transmission type c. Air-conditioned and non-air-conditioned. d. GT and non-GT model. e. Ownership of the car. • There is no difference in the selling price between the different colors of Ford Mustang? Nature of Data The researcher used a sample of 35 Ford Mustangs with all the information about the car that will be used for the research.
Some of the information given in the samples is the price of the car, age of the car, the odometer reading, convertibility, car color, air-conditioning, transmission type, GT-model type, and the ownership of the car. From the sample data, the researcher found out no missing values that might hinder the data analysis. Analysis and Methods Section The researcher used descriptive statistics in order to describe the data and to give the facts regarding the data used in the research. From the samples/data obtained, the researcher found out that the mean $8,193. 89.
This means that the average price of the Ford Mustang is $8,193. 89. The value has a standard deviation of $3,783. 47. The value means that an average spread of $3,783. 47 from the mean price was found from the data. With regard to the characteristics of the car, the researcher used histograms in order to describe the data. Figure 1. Convertible Ford Mustangs Histogram. The researcher has found out that most of the sample cars are non-convertible which accounts for 71. 4% of the total data. The convertible Ford Mustangs only accounts for 28. 6% of the total sample data. Most of the Ford Mustangs are non-convertible.
Figure 2. Ford Mustang Transmission Histogram. Most of the Ford Mustang from the sample has a manual transmission. The manual transmission Mustangs are 60% of the total sample. On the other hand, only 40% of the sample has an automatic transmission. Figure 3. Ford Mustang Air-conditioning Histogram. From the figure shows histogram of Ford Mustang Air-conditioning. From the figure, one can see that most of the Ford Mustang in the sample are air-conditioned which is 94. 3% of the total sample. One the other hand, only 5. 7% of the sample is non-air-conditioned. Figure 4. Ford Mustang GT Model Histogram.
The figure shows that most of the cars in the sample are non-GT model. The Non-GT model Mustang accounts for 62. 9% of the total sample while the GT model accounts for 37. 1% of the sample Ford Mustang cars. Figure 5. Histogram of Ownership of Ford Mustang. Ownership of Ford Mustang is one of the key factors considered in determining the selling price of the car. From the sample data, the researcher determined that most of the Ford Mustang is privately owned which sums up to 62. 9% of the total sample. On the other hand, dealer owned Ford Mustang has been added to 37. 1% of the total sample.
The colors of the cars were also considered to be one of the factors that affect the selling price of a Ford Mustang. Some of the colors of the cars in the sample are maroon, silver, gray, red, blue, black and white. Figure 6. Histogram of Ford Mustang Colors. Color might be a possible factor. According to the figure, blue and black Mustang is the most prevalent in the sample with 25. 7% of the total sample for each color. While, silver is the least prevalent with only 2. 9% of the total sample of cars. Hypothesis testing was used to determine differences in the prices of cars in different factors that might affect the car selling price.
One of the tests that were used is independent samples t-test. The t-test was used to determine difference in factors with only two categories. On the other hand, one-way analysis of variance was used to determine differences in the price of variables with more than two different categories. Lastly, the researcher will used multiple regression analysis to determine the factors that might affect the selling price of Ford Mustang. All the tests were conducted at significance level of 0. 05, with the decision to reject the null hypothesis when the p-value of the test is less than the 0. 05 significance level.
After conducting all the tests, the researcher obtained the following results from the tests (Peck, Olsen & Devore, 2008). Convertibility of Ford Mustangs The researcher obtained a t-statistic value of -2. 41 for the difference of the mean price between the convertibility of Ford Mustang. The corresponding p-value of the test was 0. 0216. Since the p-value of the t-statistic is less than the significance level of 0. 05, the researcher rejected the null hypothesis. Transmission of Ford Mustang The researcher obtained a t-statistic value of -0. 86 for the difference of the mean price between the transmissions of Ford Mustang.
The corresponding p-value of the test was 0. 3979. Since the p-value of the t-statistic is greater than the significance level of 0. 05, the researcher failed to reject the null hypothesis. Air-conditioning of Ford Mustangs The researcher obtained a t-statistic value of -0. 63 for the difference of the mean price between the air-conditioning of Ford Mustang. The corresponding p-value of the test was 0. 5336. Since the p-value of the t-statistic is greater than the significance level of 0. 05, the researcher failed to reject the null hypothesis. GT and Non-GT Ford Mustang The researcher obtained a t-statistic value of -2.
30 for the difference of the mean price between the GT and Non-GT model of Ford Mustang. The corresponding p-value of the test was 0. 0279. Since the p-value of the t-statistic is less than the significance level of 0. 05, the researcher rejected the null hypothesis. Ownership of Ford Mustang The researcher obtained a t-statistic value of -2. 01 for the difference of the mean price between the private ownerships and dealer ownerships of Ford Mustang. The corresponding p-value of the t-statistic was 0. 0526. Since the p-value of the test is greater than the significance level of 0.
05, the researcher failed to reject the null hypothesis. Color of Ford Mustang The researcher obtained an F-statistic value of 1. 73 for the difference of the mean price between different colors of Ford Mustang. The corresponding p-value of the test was 0. 1508. Since the p-value of the F-statistic is greater than the significance level of 0. 05, the researcher failed to reject the null hypothesis. Factors affecting Selling Price of Ford Mustang Multiple regression analysis was used to determine the factors that affect the selling price of the Ford Mustang. The regression analysis was conducted at 0.
05 significance level. The decision is to reject the null hypothesis that the coefficients of the variables are not equal to zero. After conducting multiple regression analysis, the following results are obtained. The researcher found out that the t-statistic associated with the reading of the odometer of Ford mustang is equal to -0. 035 with an associated p-value of 0. 9724. On the other hand, the t-statistic associated with the transmission type of Ford Mustang is 1. 169 with an associated p-value of 0. 2535. The researcher also found out that the type of air-conditioning of Ford Mustang has a t-statistic value of -0.
642 with a p-value of 0. 5267. In addition, the cylinder type of the Ford Mustang has a t-statistic value of 1. 582 with a corresponding p-value of 0. 1262. Lastly, the color and the ownership type of the Ford Mustang have a t-statistic value of -1. 198 and -1. 166 respectively. The variables also have a corresponding p-value of 0. 2420 and 0. 2548 respectively. Since the p-values of the stated variables are greater than 0. 05 significance level, the researcher failed to reject that the coefficients of the stated variables are does not differ to zero.
The researcher found out that the t-statistic associated with GT type of Ford Mustang has a t-statistic of 5. 525 with a corresponding p-value of less than 0. 001. In addition, the researcher also found out that the convertibility of the Ford Mustang has a correspond t-statistic of 6. 839 with a p-value of less than 0. 001. Lastly, the researcher found out that the age of the Ford Mustang has a t-statistic value of -9. 597 with a corresponding p-value of less than 0. 001. Since the p-values of the t-statistic are less than 0. 05, the researcher rejected the null hypothesis that the coefficients are not different to zero.
The researcher has also found out that the R2 value of the multiple regression analysis is equal to 0. 951. The value means that the model created by the researcher accounts for 95% of all the variations in the data. The researcher found out that the F-statistic associated with the model is equal to 53. 35 with a corresponding p-value of less than 0. 001. Thus, the researcher rejected the hypothesis that the coefficients of the model are equal to zero. Conclusion and Summary After analyzing the data regarding the factors that affect the selling price of Ford Mustang, the researcher found several findings regarding the data.
The researcher found out that there is a significant difference in selling price between convertible and non-convertible Ford Mustangs (t = -2. 41 p = 0. 0216). In addition, the researcher also found out that there is a significant difference in the selling price between GT model Ford Mustangs and non-GT model Ford Mustangs (t = -2. 30 p = 0. 0279). With regard to the factors that affect the selling price of Ford Mustang, the researcher has found out that from all the factors stated; only three of the factors have an effect to the selling price of Ford Mustang.
The researcher found out that the GT type of the Ford Mustang has a significant effect to the selling price of Ford Mustang (t = 5. 525 p < 0. 001). On the other hand, the researcher also found that convertibility (t = 6. 839 p < 0. 001) and age (t = -9. 597 p < 0. 001) of the Ford Mustang have a significant effect to the selling price of the Ford Mustang. Lastly, the researcher found out a model that can be used to predict the selling price of a Ford Mustang. The model is given below. PRICE = 3,119. 3379*CONVERT – 1,277. 2089*AGE - 0. 00032349*MILES + 493. 6525*TRANS - 512.
3901*AIR + 227. 3458*CYL - 108. 1700*COLOR + 2,790. 5210*GT - 490. 3302*OWNER + 10,788. 9800 Although the researcher has found only three significant factors that affect the selling price, the model still includes the other insignificant variables since the model is significant predictor of selling price of Ford Mustang (F = 53. 35 p < 0. 001). The analysis of the selling price of Ford Mustang was done to determine factors that affect the selling price of the car. In addition, the research was done to create a model that will predict the future selling price of Ford Mustang cars.
The researcher has found out that although some factors affect the selling price of Ford Mustang, the model created is still considered even when there are other insignificant factors. This is because the researcher found the model to be significant due to hypothesis testing. However, the researcher suggests conducting several regression analyses to create a model that can predict the selling price of Ford Mustang better than the model created by the researcher. The idea is to use the significant factors that affect the selling price of the Ford Mustang.
The researcher was able to determine factors that affect the selling price of the Ford Mustang. The factors that affect the selling price are the convertibility of the car, the age of the car and whether the car is a GT or a non-GT type. The researcher was also able to create a model that will predict the selling price of Ford Mustang. References Peck, R. , Olsen, C. & Devore, J. (2008). Introduction to statistics and data analysis. Belmont, CA: Brooks/Cole, Cengage Learning. Garson, D. (2010). Multiple regression analysis. Statnotes. Retrieved August 25, 2010 from http://faculty. chass. ncsu. edu/garson/PA765/regress. htm.
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