Stats Project

INTO Newcastle University
INU0511
Mathematics for Business
Carry out a statistical

analysis of house prices in
two areas of Newcastle
Upon Tyne
Name: Derek Ka Shing Wong
Tutor: Adrian Janetta

Due date: 20th June 2008
Definitions
In this project, box plots are the main statistical method of investigation. Box
plots consist of several important components (maximum & minimum value, upper &
lower quartile, median and interquartile range).
• The lower quartile (Q1) is the value 25% of the way through the distribution.
• The median (Q2) is the value 50% of the way through the distribution
• The upper quartile (Q3) is the value 75% of the way through the distribution
• Interquartile range (IQR) = Upper quartile – Lower quartile
IQR = Q3-Q1
(It gives the range of the middle 50% of the distribution)
The box plots are drawn by Microsoft Excel and here are the formulas obtaining
the values required to draw the diagrams.
• Q1  =QUARTILE(D1:D60,1)
• Minimum value  =MIN(D1:D60)
• Maximum value  =MAX(D1:D60)
2
Introduction
House prices vary according to the area, type of houses, number of bedrooms and
some other factors. Through this statistic project, I hope to find out more about the
variation in prices. I will first collect data about house prices in 2 different areas of
Newcastle Upon Tyne, which would be Jesmond and Byker. Jesmond is supposedly
known as a more wealthy area compared to Byker. Hence, my hypothesis is that from my
investigation results, all of them would indicate that no matter which house types and
number of bedrooms, property prices in Jesmond would definitely be higher than that of
Byker.
First of all, I went to different agencies’ websites to search on house prices and
collected the data. Secondly, I went to a Pattinson agency to collect more data and
compared with the data that I collected online; I found that the data are similar. Therefore,
I feel that online materials are just as accurate and as reliable as the direct primary
collection of data from agencies in person. While collecting data, I was careful not to
choose similar data. I randomly chose data by choosing different agencies and different
pages of websites; I did not choose the first 30 results as they would be similar to each
other and would not yield an accurate result. I then compiled them carefully into tables in
ascending bedroom numbers and ascending spelling of house types.
3
Semi-
Detached Terraced
Detached
House Houses
House
(D house) (T house)
(SD house)
Bungalow Flats
(B) (F)
Others:
Apartment (A)
Maisonette (M)
4
Jesmond overall list
Area Type Bedrooms Price
Jesmond A 2 £115,000
Jesmond D house 4 £800,000
Jesmond D house 4 £1,009,500
Jesmond Flat 1 £124,950
Jesmond M 3 £285,000
Jesmond SD House 4 £525,000
Jesmond SD House 6 £1,020,000
Jesmond T house 3 £239,950
5
Byker overall list
Area Type Bedrooms Price
Byker A 1 £98,000
Byker A 1 £64,950
Byker A 2 £79,950
Byker A 2 £80,000
Byker D house 4 £260,250
Byker Flat 1 £85,000
Byker M 3 £60,000
Byker M 3 £78,950
Byker M 4 £190,000
Byker SD house 4 £79,950
Byker T house 2 £99,950
6
Jesmond Byker
Q1 £248,713 £79,950
Min £86,000 £60,000
Q2 £477,500 £99,475
Max £1,169,995 £260,250
Q3 £787,500 £153,738
IQR £538,787 £73,788
Overall comparison between Jesmond & Byker
£1,400,000
£1,200,000
£1,000,000
Q1
£800,000 Min
Price
Q2
£600,000 Max
Q3
£400,000
£200,000
£0
Jesmond Byker
Area
This, however, is not accurate; the main reason being the comparison of house
prices is not focused. Prices vary so much as different types of houses, different number
of bedrooms are included, hence, the low accuracy. The result will be very different if we
narrow the focus into two house types and two different numbers of bedrooms. Also, the
7
interquartile range shows that there are more variation in house prices in Jesmond
compared to Byker. This is probably due to the greater land area, the greater variety of
house types and number of bedrooms.
Variations in house types

First, we would focus on the variations of house types, then we would investigate
and analyse the results and see what trend there is. Secondly, I would then move on to
another aspect (likely to be number of bedrooms) which can affect house prices;
depending on the price trend shown when house types vary.
SD houses price list (bedrooms: 4-6)

If we can just look at the semi-detached houses and group them together (along
with the same number of bedrooms); we will be able to see more clearly the differences
in house prices.
8
Jesmond Byker
Q1 £525,000 £79,950
Min £299,950 £74,999
Q2 £720,000 £112,000
Max £1,020,000 £250,000
Q3 £750,000 £165,000
IQR £225,000 £85,050
Comparisons of SD houses in Jesmond & Byker
£1,200,000
£1,000,000
£800,000 Q1
Min
Price
£600,000 Q2
Max
£400,000 Q3
£200,000
£0
Jesmond Byker
Area
From the graph, we can deduce that prices of Jesmond’s semi-detached houses are
much higher when compared to Byker as the Jesmond box plot maximum and minimum
values, median, upper and lower quartiles are all comparatively higher than the Byker
box plot. The interquartile range is also higher for Jesmond’s set of data, similar to the
overall comparison between Jesmond and Byker. This is probably again, due to the
reason of great variety in many different aspects of properties in Jesmond compared to
9
Byker. Personally, I feel that this trend would carry on if I continue investigate other
house types. However, that may not be true; therefore I would do another box plot which
focuses on flats in these 2 areas.
Flat houses price list (1-3)


Jesmond Byker
Q1 £151,238 £72,463
Min £124,950 £67,000
Q2 £229,975 £82,500
Max £550,000 £210,000
Q3 £301,250 £133,713
IQR £150,012 £61,250
10
Comparison of Flats between Jesmond & Byker
£600,000
£500,000
£400,000
Q1
Min
Price
£300,000 Q2
Max
Q3
£200,000
£100,000
£0
Jesmond Byker
Area
Again, similar to the box plot on semi-detached house prices; Jesmond’s flats are
overall more expensive than Byker’s. The maximum and minimum values, upper and
lower quartiles, the median and the interquartile range are all comparatively higher in
Jesmond’s set of data. Relating this to earlier comparisons, the trend is similar to the
overall comparison and the comparison of semi-detached houses. Therefore, this is a
proven theory that however I change the house types and draw box plots, the result would
be very similar. Now I would move onto variations in the number of bedrooms and see
how the shapes and position of the box plots would change.
11
Variations in number of bedrooms
First I would do a comparison of 2-3 bedroom houses in the 2 areas and then
secondly, I would compare house prices of 4-5 bedroom houses. Doing a ‘2-3’ and a ‘4-5’
would be better than analysing just ‘3’ or ‘4’ bedrooms. It gives a more average and
probably clearer indication of differences between having less and more bedrooms.
2-3 bedrooms
Byker A 2 £79,950
Byker A 2 £80,000
Byker M 3 £60,000
Byker M 3 £78,950
12
Jesmond Byker
Q1 £170,000 £72,200
Min £86,000 £60,000
Q2 £257,475 £80,000
Max £825,000 £210,000
Q3 £370,000 £99,988
IQR £200,000 £39,988
Comparison of house prices with 2-3 bedrooms in Jesmond & Byker
£900,000
£800,000
£700,000
£600,000
Q1
£500,000 Min
Price
Q2
£400,000 Max
Q3
£300,000
£200,000
£100,000
£0
Jesmond Byker
Area
13
4-5 bedrooms

Byker M 4 £190,000
14
Jesmond Byker
Q1 £359,750 £100,500
Min £239,350 £74,999
Q2 £720,000 £133,500
Max £1,120,950 £260,250
Q3 £800,000 £192,500
IQR £440,250 £92,000
Comparison of house prices with 4-5 bedrooms in

Jesmond & Byker
£1,200,000
£1,000,000
£800,000
Q1
Min
Price
£600,000 Q2
Max
£400,000 Q3
£200,000
£0
Jesmond Byker
Area
When comparing bedrooms, I realised that there is not much difference as the result is
similar to comparing house types. Jesmond’s prices are still much higher than that of
Byker. However, when focusing on just Jesmond, it is apparent that house prices vary
15
more when I am looking at 4-5 bedrooms houses. The IQR of ‘4-5 bedrooms’ is £440250,
whereas the IQR of ‘2-3 bedrooms’ is £200000. This is the evidence of the greater
variation of house prices when looking at bedrooms in Jesmond. The same can be said of
Byker, however, the difference is as great as Jesmond’s IQR difference. From these
discussions regarding ‘2-3’ and ‘4-5’ bedrooms, we can conclude that when the number
of bedrooms increases, house prices’ variation would increase as well. More information
regarding the relationships between IQR values would be shown below.
16
Relationships between different IQR values
Jesmond Byker
Overall £225,000 £85,050

IQR
Jesmond Byker
Jesmond Byker
SD IQR £225,000 £85,050 2-3 rooms £200,000 £39,988

IQR
Flat IQR £150,012 £61,250
4-5 rooms £440,250 £92,000
IQR
Difference £74,988 £23,800
Difference £240,250 £52,012
Looking at these relationships between the IQR values and the differences among
them, I have realised that IQR can tell me a great deal of information. When the IQR is
greater, it shows a greater range of values. Hence, the difference between Jesmond’s
semi-detached houses’ and Flats’ IQR indicates the fact that semi-detached houses’ prices
vary more than flats’ prices; and the same goes for Byker when comparing semi-detached
houses and flats.
As for the number of bedrooms, Jesmond’s 4-5 bedrooms’ greater IQR, when
compared to 2-3 bedrooms, suggests that 4-5 bedroom houses have a greater range of
17
values; and the same goes for Byker when comparing 2-3 bedroom houses and 4-5
bedroom houses.
Relationships between mean values
Mean is the mathematical term for average value. Usually in a set of distributed
values, we just have to add them all up, divide by the total number of units and we would
be able to obtain the average. In Microsoft Excel, the formula would be
=AVERAGE(D1:D60), for example. Also, it is very important to note that mean does not
equal to median (Q2).
Jesmond Byker
Overall £531,628 £119,958

Mean
Jesmond Byker
Jesmond Byker
SD Mean £747,491 £136,390 2-3 rooms £323,825 £95,407

Mean
Flat Mean £264,150 £115,380
4-5 rooms £638,419 £147,092
Mean
Difference £483,341 £21,010
Difference £314,594 £51,685
18
From the above tables, if we look at the differences between the overall mean
values with the other mean values, we can notice that the change in mean values indicates
rather useful information; for example, semi-detached houses mean values is higher than
that of the overall mean value whereas flats mean values is lower when compared to the
overall mean values. This clearly demonstrates the fact that in general, semi-detached
houses are more expensive than flats in both Jesmond and Byker. In another words, when
we just focus on semi-detached houses, the mean value would be X. However, if we
include flats with the semi-detached houses when calculating mean value; the new mean
value would be lower than X. This is because flats prices are affecting the average house
prices in an area.
This is the same as a situation in a classroom, perhaps the average height is
170cm; however, if someone tall like Yao Ming (226cm) comes in, the average height
would be increased as Yao Ming’s height disrupted the distribution of heights in a
classroom. When a small child (100cm) walks in instead of Yao Ming, the average height
would be decreased. The situation is the same here when we are comparing house prices;
Yao is like the expensive semi-detached houses and the small child is like the cheaper
flats. Therefore, we can conclude that semi-detached houses are generally more
expensive than flats in both Jesmond and Byker.
Conclusion
Through investigating with box and whisker plots, interquartile and mean values,
I have come to the conclusion that my hypothesis is correct; that Jesmond is a wealthier
area than Byker in terms of property prices. The main aspects affecting house prices
would be the area, the house types and the number of bedrooms. The theory that
19
Jesmond’s houses are more expensive does not change in whichever comparisons
between different aspects that I made. Semi-detached houses in both areas are generally
more expensive than flats; 4-5 bedroom properties have a greater range of prices in both
areas as well.
Bibliography
Sarahmains - http://www.sarahmains.com/home.html [accessed on 12/6/08]
Rightmove - http://www.rightmove.co.uk/ [accessed on 12/6/08]
Pattinson - http://www.pattinson.co.uk/Default.aspx [accessed on 12/6/08]
Rook Matthew Sayers - http://www.rookmatthewssayer.co.uk/residential/

[accessed on 12/6/08]
Mansons - http://www.mansons.net/ [accessed on 12/6/08]
Sanderson Young - http://www.ukpropertyshop.co.uk/estate-

agents/sanderson-young- 13930.shtm [accessed on 12/6/08]
Andrew Craig - http://www.est8.co.uk/agent/793.htm [accessed on 12/6/08]
20

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INTO Newcastle University

Carry out a statistical

Name: Derek Ka Shing Wong

Tutor: Adrian Janetta

lower quartile, median and interquartile range).

• Interquartile range (IQR) = Upper quartile – Lower quartile

(It gives the range of the middle 50% of the distribution)

the values required to draw the diagrams.

• Minimum value  =MIN(D1:D60)

• Maximum value  =MAX(D1:D60)

ascending bedroom numbers and ascending spelling of house types.

Overall comparison between Jesmond & Byker

house types and number of bedrooms.

Variations in house types

depending on the price trend shown when house types vary.

SD houses price list (bedrooms: 4-6)

Jesmond SD House 4 £299,950

Jesmond SD House 4 £750,000

Jesmond SD House 4 £720,000

Jesmond SD House 6 £1,020,000

Byker SD house 4 £79,950

Byker SD house 4 £112,000

Byker SD house 4 £74,999

Byker SD house 4 £165,000

Byker SD house 6 £250,000

Min £299,950 £74,999

Max £1,020,000 £250,000

IQR £225,000 £85,050

Comparisons of SD houses in Jesmond & Byker

reason of great variety in many different aspects of properties in Jesmond compared to

focuses on flats in these 2 areas.

Flat houses price list (1-3)

Byker Flat 1 £85,000

Min £124,950 £67,000

Max £550,000 £210,000

IQR £150,012 £61,250

overall comparison and the comparison of semi-detached houses. Therefore, this is a

Comparison of house prices with 2-3 bedrooms in Jesmond & Byker

Byker D house 4 £260,250

Comparison of house prices with 4-5 bedrooms in

regarding the relationships between IQR values would be shown below.

Overall £225,000 £85,050

SD IQR £225,000 £85,050 2-3 rooms £200,000 £39,988

houses and flats.

Relationships between mean values

be able to obtain the average. In Microsoft Excel, the formula would be

equal to median (Q2).

Overall £531,628 £119,958

SD Mean £747,491 £136,390 2-3 rooms £323,825 £95,407

Difference £314,594 £51,685

we just focus on semi-detached houses, the mean value would be X. However, if we

This is the same as a situation in a classroom, perhaps the average height is

would be increased as Yao Ming’s height disrupted the distribution of heights in a

expensive than flats in both Jesmond and Byker.

Sarahmains - http://www.sarahmains.com/home.html [accessed on 12/6/08]

Rightmove - http://www.rightmove.co.uk/ [accessed on 12/6/08]

Pattinson - http://www.pattinson.co.uk/Default.aspx [accessed on 12/6/08]

Rook Matthew Sayers - http://www.rookmatthewssayer.co.uk/residential/

Mansons - http://www.mansons.net/ [accessed on 12/6/08]

Sanderson Young - http://www.ukpropertyshop.co.uk/estate-

Andrew Craig - http://www.est8.co.uk/agent/793.htm [accessed on 12/6/08]

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