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Guilford Country Auditors

An auditor for the Guilford County government would like to develop a model to predict the property taxes based on the ages of single-family houses. A random sample of 19 single-family houses has been selected with the following results as shown in the attached file.

A. What statistical model would you recommend they use to assess property taxes based on the age of single-family houses? Why?

A logarithmic trendline is a best-fit curved line that is most useful when the rate of change in the data increases or decreases quickly and then levels out. A logarithmic trend line can use negative and/or positive values.

The coefficient of determination, r 2, is .98025 which means that 98.02% of the total variation in y can be explained by the relationship between x and y. Yes, it is a very "good fit".

B. Perform all necessary statistical tests. Is you model apt, significant, have any outliers, do you have any highly correlated variables?
RESIDUAL OUTPUT Observation Predicted Taxes Residuals Standard Residuals
1 745.9836 179.0163968 2.244866094
2 735.7094 134.2905757 1.684004179
3 715.1611 93.83893368 1.176740479
4 715.1611 4.838933676 0.060680241
5 704.8869 -10.88688735 -0.136521596
6 674.0644 -44.06435043 -0.552567072
7 653.516 -27.51599249 -0.345050619
8 653.516 -91.51599249 -1.14761079
9 632.9676 -86.96763454 -1.09057437
10 602.1451 -79.14509762 -0.992479736
11 550.7742 -70.77420275 -0.887508692
12 530.2258 -44.22584481 -0.554592212
13 499.4033 -37.40330789 -0.469037581
14 499.4033 -58.40330789 -0.732377637
15 448.0324 -22.03241302 -0.276286518
16 396.6615 -28.66151816 -0.359415514
17 345.2906 4.709376709 0.059055597
18 242.5488 105.4511664 1.322357909
19 242.5488 79.45116644 0.99631784

No outliers in the model. There are no standard residuals greater than or equal to 3 and there are no residuals

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