Like the title states, I need help from any of you who have taken stats. I have two problems that I need help with, and was just wondering if any of you can help me out there since it seems as if there are many intelligent people out there. Any input is very much appreciated. Thank you in advance for all your help.

Here are the problems..

Problem A:

Regional housing price trends are often displayed using "median prices" (vs. modes or means).

Examples: (click here) or real estate section of selected editions of the San Jose Mercury or the San Francisco Chronicle, or similar publications.

Why? Briefly explain any pros and cons.

Problem B:

Some local newspaper publications have recently advertised "Dream House Raffles."

Example: (from San Jose Mercury - 7/10/09)

About the Raffle: A limited number of $150 tickets will be sold. The Grand Prize winner chooses either the $2.4 million house in San Francisco or $1.8 million in cash. Over 370 total prizes will be given out making the odds of winning a prize only 1 in 100. Individuals who purchase two or more tickets are automatically entered into the bonus Multi-Ticket drawing for $40,000 in luxury prizes. Proceeds benefit Yerba Buena Center for the Arts in San Francisco.

About the Dream House: This Edwardian residence totals over 4,200 square feet, comprising a glorious 4 bedroom, 4.5 bath main house with 4 car garage and a completely self-contained 2 bedroom bath guest house, ...

Based on "expected value" and other statistical analyses, would you recommend entering the raffle? Why or why not?

 

#1 IIRC, u use median because its in the middle of the range... not the most frequent recurring pricing, or avg of all the prices which can skew the pricing of homes in that region. a region is huge... so when you do a breakdown of costs by "neighborhood" or housing development sectors, the pricing will vary greatly... and if YOUR direct neighborhood as an example, you live in the upscale section of your block, but just down the street are older houses which are lower in value than yours, but the section is huge and there's more houses in the lower value sector than your upscale section. so if you display a median range of pricing, you're bound to get an accurate avg between the 2.

not sure if this made sense to you, but it did to me. thats all that matters.

=P


and as for #2... umm... my mind isn't functioning too well...

 

hahah that's no problem. thanks for all your help though. It kinda makes sense to me.. I understand what you're saying about the median and stuff. My mind isn't functioning well either.. I've been working on stats for the past 5 hours. Finals are coming up and I just needed someone to guide me towards the right direction.

Btw, no gym today? Gonna get back to break dancing? haha

 

dam! I wish I could help you on #2... I swear I could've done it 2 months ago... grr

 

A The median displays the value with an equal amount of data above and below. IIRC this kept outrageous numbers from throwing off the "average"

B It's been too long to remember how to deal with expected values. If you really need help let me know and I'll dig out my stats notes.

 

haha yeah me and ave reallyyy need help. all the help you can give would be very much appreciated. thanks for all the help.

stats is teh suX0rs.

 

I love how we take classes and after we pass the exam, we forget those sets of notes and start trying to remember the next...

Then you graduate and within a year forget most of what you learned except the things that only stuck out to you (maybe a handful).

So ur supposed to keep the books in order to review them when the time is needed (which hardly ever comes). Good luck =P

 

I still have my book on the shelf, but honestly I never even opened it. I just had a really good teacher. I just need to find my notes (which I saved because I really liked the class, I've just had no reason to use the information)

 

thanks for shedding some light AR and Matt

kinna helped with your explanation. ill probably work on question A.

 

because i heard the greatest the example of explaining mode, median and mean...

mean = avg of the values within the set
median = middle value within the set
mode= most number of a value within the set


let's say you are dating the sluttiest **** of the campus sorority.

lets call her nancy.

after getting lucky with nancy on the first date you find out she's keeping track of the length of the guys she's been with.

you get an email that has this:


4": 1
5": 4
6": 5
7": 3
8": 2
9": 1
10": 1 and she puts a smiley face besides the note.

also in the email is a power point presentation with the following:

mean: 2.43
mode: 1
median: 2

what does that this all mean? look like the average length of ******* that nancy's been taking is around 5.5" since the mean is 2.43 and that's halfway been 5" (#2) and 6" (#3)

with this data set, the mode and median doesnt tell you jack. too small of dataset.




so going back to the OP's question, in question A, why is the median prices of homes used?

i think it's misused. it should be the AVERAGE cost, but then again, the term MEDIAN sounds better than MEAN.

for question B, a couple more things needs to be known. once a ticket, out of the 100 is drawn, does it go back to the pool or no?

also, what the mininum value of the other 370 prizes?

arrrg.... must get sleep... saw midnite showing of DISTRICT 9.... and you are making me think back to college 20 years agol...

lol...

 

b)
odds of winning a prize - 1 prize / 100 tix
With 370 total prizes, that means they are predicting to sell 370*100 tix= 37,000 tix

-If you assume that that 1/100 people win a small prize, then the total value of those mini prizes are 370*20 = $7400.
-they didn't say whether or not the $40,000 prize is one big one, or multiple smaller ones. I'll assume it's 40 prizes worth $1000 each.

-total number of prizes - jackpot + 40 luxury prizes + 370 small prizes = 411
-Total value of prizes is 1.8million + 40,000 + 7400= $1,847,400
-Total # of tix = 37,000
-Avg value of prize= total value of all prizes / # of prizes = $1,847,000 / 411= $4493

If the odds of winning a prize is 1/100, and each ticket is $150, to break even you need to win a prize of $15,000 every 100 times (150*100). Right now, you're only winning $4493 for every 100 tix, but spending $15,000= not worth it.

There needs to be less people in the contest to be worth it.

At at avg prize value of $4500, you need to win 1 prize for every 30 tix at $150 per ticket. That means, if a prize is given out every 30 tix, and there are 411 prizes, there can be no more than 30*411=12330 tix sold.

If 12,330 or less people enter the contest, yes you should definitely enter cuz you'll statistically break even.

 

wow.. thanks everyone for such great inputs. you must be one hell of a genius haha

 

i took ap stat but i dont remember anything lol.