STUDENT ID No: 100010724 MODULE CODE: MN5472

SCHOOL OF MANAGEMENT
Taught Postgraduate Programmes

MODULE TITLE: Research Issues in Business,

Management and Marketing

LECTURER: Gail Greig and Xiaoying Li DEADLINE DATE: 10thJan 2011, 12.00pm

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1. Main Research Objective 1253 word

To find out the factors which affectthemarketing of houses and the house prices by using the quantitative techniques and SPSS.

2. The Sample

Table 1. DescriptiveStatistics price N Valid Missing Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Kurtosis Std. Error of Kurtosis 105 0 221.1010 213.5700 188.33 47.10990 2219.342 .474 .236 -.276 .467 size 105 0 2231.41 2217.00 2091
a

distance 105 0 14.63 15.00 16 4.874 23.755 .402 .236 -.174 .467

249.315 62158.019 .357 .236 .528 .467

a. Multiple modes exist. The smallest value is shown

Table 2. conservatory Cumulative Frequency Valid 0 1 Total 38 67 105 Percent 36.2 63.8 100.0 Valid Percent 36.2 63.8 100.0 Percent 36.2 100.0

Table 3. garage Cumulative Frequency Percent Valid Percent Percent

Valid

0 1 Total

34 71 105

32.4 67.6 100.0

32.4 67.6 100.0

32.4 100.0

Table 4. area Cumulative Frequency Valid 1 2 3 4 5 Total 15 20 25 29 16 105 Percent 14.3 19.0 23.8 27.6 15.2 100.0 Valid Percent 14.3 19.0 23.8 27.6 15.2 100.0 Percent 14.3 33.3 57.1 84.8 100.0

The above table is the result done through SPSS. From the output shown above we know that there are 105 houses in total. Concerning the variable price, we have information from 105 houses thatthedistribution is positively skewed and is low peaked, with a mean of 221100 pounds and standard deviation of 47.11. And in the case of the size, we can judge that thedistribution is positively skewedand is highly peaked. The average comes out to be 2231.41 square feet and the median is 2217.00 square feet. As to the variable distance, the distribution is positively skewed and low peaked, with a mean of 14.63 miles and standard deviation of 4.87. In addition, from tables above we can see that 67% of the houses have a conservatory and 71% of the houses have a garage. Furthermore, the houses in area 4 were sold the most which accounted for 27.6% of the total while the houses sold in area 1 only occupies 14.3%.

3. Analysis of the Data

3.1 One Sample t-Test

Recently, a local newspaper reported that the average house size in the city is 2,200 square feet and the mean price is 215,000. In order to test whether the sample is a random sample of houses in the city, one sample t-Test is used and the following assumptions are made:

(1) Price

Null Hypotheses: Ho: the mean price in the city is not 215,000

Alternative Hypotheses:H1 : the mean price in the city is 215,000

Level of Significance: = 0.05

Table 5. Price One-Sample Test Test Value = 215 95% Confidence Interval of the Difference t price 1.327 df 104 Sig. (2-tailed) .187 Mean Difference 6.10105 Lower -3.0159 Upper 15.2180

In the given tables, we can clearly see that the p value comes put to be 0.187, which is larger than the pre-assigned level of significance which is 0.05. This result does not reject the null hypotheses, which means the average house size in the city is not 2,200 square feet.

(2) Size

Null Hypotheses: Ho: the average house size in the city is not 2,200 square feet

Alternative Hypotheses: H1 : the average house size in the city is 2,200 square feet

Level of Significance: = 0.05

Table 6. Size One-Sample Test Test Value = 2200 95% Confidence Interval of the Difference t size 1.291 df 104 Sig. (2-tailed) .200 Mean Difference 31.409 Lower -16.84 Upper 79.66

From the results above, we can witness that the p value is 0.200 that is larger than the pre-assigned level of significance which is 0.05. This fact does not reject the null hypotheses, which suggests that the average house size in the city is not 2,200 square feet.

3.2 Independent Sample t Test

The different lots, the structure of the house, grading or materialsmay bring different values.Therefore, independent sample t Test will be used to identify whether there is a different between the mean selling price of a home with a conservatory and the mean selling price of a house without a conservatory in this section. The following assumptions are made:

Null Hypotheses Ho: there is no difference between the mean selling price of a home with a conservatory and the mean selling price of a house
4

without a conservatory

Alternative Hypotheses: H1 : there is a difference between the mean selling price of a home with a conservatory and the mean selling price of a house without a conservatory

Level of Significance: = 0.05

Table 7. Independent Samples Test Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of the Difference Sig. F price Equal variances assumed Equal variances not assumed -3.477 100.216 .001 -28.69064 8.25066 -45.05929 -12.32200 8.440 Sig. .004 t -3.123 df 103 (2-tailed) .002 Mean Difference -28.69064 Std. Error Difference 9.18831 Lower -46.91350 Upper -10.46779

As shown in the given tables, due to the significance level of Levenes test is 0.004 which is less than 0.05, the data violate the assumption of equal variance and the second line in the table should be used as it refers to equal variance not assumed. Thus, the significance level for t testis 0.01 which is less than the cut-off of 0.05. This suggests that the assumption has been violated andthe results reject the null hypotheses. Therefore, there is a significant difference between the mean selling price of a home with a conservatory and the mean

selling price of a house without a conservatory.

3.3 ANOVA

As mentioned before, the lot is a critical factor to decide the value of houses. Different lots may bring different values.In this section, ANOVA will be adopted to test whether there is a difference inthe mean selling price of the homes among the five areas and the following assumptions are made:

Null Hypotheses

Ho: there is no difference inthe mean selling price of the homes among the five areas

Alternative Hypotheses: H1 : there is a difference inthe mean selling price of the homes among the five areas

Level of Significance: = 0.05

Table 8. Descriptives price 95% Confidence Interval for Mean N 1 2 3 4 5 Total 15 20 25 29 16 105 Mean 196.9180 227.4500 228.7908 216.9228 231.3944 221.1010 Std. Deviation 35.78983 44.19766 48.66741 49.97889 48.79890 47.10990 Std. Error 9.24089 9.88290 9.73348 9.28085 12.19973 4.59746 Lower Bound 177.0983 206.7649 208.7019 197.9118 205.3913 211.9841 Upper Bound 216.7377 248.1351 248.8797 235.9337 257.3975 230.2180 Minimum 125.87 154.31 155.40 125.01 173.07 125.01 Maximum 245.43 307.80 327.24 345.33 326.29 345.33

Table 9. Test of Homogeneity of Variances price Levene Statistic .699 df1 4 df2 100 Sig. .594

Table 10. ANOVA price Sum of Squares Between Groups Within Groups Total 13258.314 217553.280 230811.595 df 4 100 104 Mean Square 3314.579 2175.533 F 1.524 Sig. .201

The ANOVA summary table reveals that the between-group mean square is 3314.579, and the within-group mean square is 2175.533. The F-ratio is 1.524, and the pvalue =0.201 >0.05 indicates that the results does not reject the null hypotheses and there is no difference in the mean selling price of the homes among the five areas.

3.4 Correlation

Correlation analysis is always used to describe the strength and direction of the linearrelationship between two variables. (Pallant, 2010:121) In this section, correlation will be applied to examine whether there is an association between thevariables selling price and distance.

Table 11. Correlations price price Pearson Correlation Sig. (2-tailed) N distance Pearson Correlation Sig. (2-tailed) N 105 -.347
**

distance 1 -.347
**

.000 105 1

.000 105 105

**. Correlation is significant at the 0.01 level (2-tailed).

In the table given above, we can judge that the correlation coefficient is negative and this indicates thatthere is a negative correlation between the variables selling price and distance.The longerdistance it takes, the lower house price is.In addition, as the r value is 0.347, there is a medium correlation between the twovariables, suggesting a comparatively strong relationship between selling price and distance.

3.5 Multiple Regression

Pallant (2005:140) once stated that Multiple regression is not just one technique but a family of techniques that can be used to explore the relationship between one continuous dependent variable and a number of independent variables or predictors.Therefore, it will be utilized to identify the determinants of house price in thiscity from seven variables, including bedrooms, garage, baths, area, size, conservatory and

Table 12. Model Summary Adjusted R Model R R Square Square Std. Error of the Estimate

Model 1

Table 13. ANOVAb 1 .728 .530 .496 33.44357 Sum of Squares df Mean Square F a. Predictors: (Constant), baths, area, garage, size, conservatory, Regression 122319.768 7 17474.253 15.623 distance, bedrooms
a

Sig. .000a

Residual Total

108491.827 230811.595

97 104

1118.472

a. Predictors: (Constant), baths, area, garage, size, conservatory, distance, bedrooms b. Dependent Variable: price

From the results given in the tables, we can see that none of the variables has been dropped and the regression line explains about 53% of the variancein house price.

Table 14. Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) size bedrooms conservatory distance area garage baths a. Dependent Variable: price B 45.912 .038 8.068 20.104 -1.101 -1.616 37.194 19.065 Std. Error 40.077 .015 2.542 7.138 .741 2.709 7.668 8.012 .202 .257 .206 -.114 -.044 .371 .171 Coefficients Beta t 1.146 2.571 3.174 2.816 -1.486 -.596 4.851 2.380 Sig. .255 .012 .002 .006 .141 .552 .000 .019

In this case the largest beta coefficient is 0.371, which is for garage. This suggests that variable garage makes the strongest unique contribution to explainthe dependent variable house price while the smallest beta value is 0.044, which is for area, indicating that it made the least contribution. Furthermore, the Sig. value of size, bedrooms, conservatory garage and baths are less than 0.05, which means these variables are making a significant unique contribution to predict the house price.From

the above model, the multiple regression line that can be fitted comes out to be:

Y(price) = 45.912+ 0.038X1+8.068X2+20.104X3+37.194X4+19.065X5

4. Conclusion
From all the analysis that has been done, we can conclude the following things.

1. The sample reported in the local newspaper is not a random sample of the houses in this city. 2. There is a significant difference between the mean selling price of a home with a conservatory and the mean selling price of a house without a conservatory. 3. There is no difference in the mean selling price of the homes among the five areas. 4. There is a comparatively strong negative correlation between the variables selling price and distance. 5. The determinants of house price in thiscity are size, bedrooms, conservatory garage and baths and the multiple regression line that can be fitted comes out to be:

Y(price) = 45.912+ 0.038X1+8.068X2+20.104X3+37.194X4+19.065X5

5. References: (2005)Discovering Statistics Using SPSS for Windows.London: SagePublicationsLtd. Pallant, J. (2005) SPSS Survival Manua:a step by step guide to dataanalysis using SPSS.Sydney:Ligare. pp. 47-228. Field, A.

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