Ch 3-4 Flashcards
We stated earlier that a large sample consists of x or more observations and a small sample consists of fewer than observations.
30
30
In statistics, the result of a sample selection process where all the numbers of a population or population stratum have the same probability of being selected.
defines
Random Sample
In statistics, a systematic error. A statistic is biased if it systematically differs from the population parameter being estimated, such as the average sale price. An example in appraisal valuation modeling would be if the model results in consistently overvalued properties that sold above the average sale price and undervalued properties that sold below the average sale price.
defines
Bias
A statistical sample in which the population is divided into one or more essential subgroups, with random samples drawn from each subgroup.
Defines:
Stratified Random Sample
subgroups = strata
A sample produced by an unscientific, non-random selection process; for example, a x sample may be a sample based upon an appraiser’s judgment about which cases to select or based on a convenience sample.
defines:
nonprobability
Nonprobability Sample
That is the type of strategy that many appraisers have to adopt on a daily basis, as they have limited databases.
In statistics, the difference between the highest and lowest values in a set of numbers.
defines
Range
The word “range” is used differently in x than how it is used in x. If you were to express your final opinion of value as a range, you would say the value was $290,000 to $320,000 - you would not say your final range of value was x
USPAP
statistics
$30,000.
The amount a variable’s value differs (i.e., deviates) from the mean or some other benchmark.
defines
Deviation
The sum of the absolute deviations divided by the number of observations.
defines
Average Deviation
The difference between an observation and the measure of central tendency (such as the arithmetic mean or median) for that array, without regard as to the sign (positive or negative) of the difference. For example, if the observed value is 6 and the mean of these observations is 10, then the difference (or deviation) would be 6 - 10 or -4; dropping the negative sign would yield the absolute deviation, which in this case would be 4.
defines
Absolute Deviation
What means: Market Area 2 has a higher average deviation than Market Area 1.
Market area 2 is more diverse. The land sells at more widely varying amounts. We probably will have to make more adjustments in our sales comparison grid for differences among the land parcels there.
xx is a tool that shows comparisons and indicates the depth of spread among variables.
Average deviation
The square root of the variance. The sample standard deviation is the square root of the sample variance and the population standard deviation is the square root of the population variance; i.e., the square root of the sum of the squared deviations from the mean divided by either the population size or by the sample size minus 1.
defines
Standard Deviation
= a tool that has more power and can be used for further analysis when we get into inferential statistics.
A theoretical distribution often approximated in real-world situations. It is symmetrical and bell-shaped.
defines
A normal distribution
A xx, when graphed, has the highest point in the middle, and tapers off on each side evenly. It forms what is called a bell curve or a normal curve.
normal distribution
A symmetrical, bell-shaped curve that represents the distribution of a population of certain types of measurements or the frequency distribution of all possible means in large samples that may have been drawn from an unknown population distribution.
defines
A normal curve
The process of drawing conclusions about population characteristics through analysis of sample data.
defines
inferential statistics
Assume we draw a sample of 50 house sales from a market area. We plot the sales and calculate the mean and standard deviation.The mean of these sales is $200,000 and the standard deviation is $10,000.
That means that of the 50 sales, about 68% are found between xx
Around 95% of the sales are found between xx, and more than 99% of the sales would be found between xx.
$190,000 and $210,000.
$180,000 and $220,000
$170,000 and $230,000.
In statistics, a numerical range around a sample mean accompanied with a statement of how confident one is that the true population mean lies within the interval.
Defines
Confidence Interval
numerical range = interval
To estimate, calculate, or indicate in advance. x made by appraisers are based on past trends and the perceptions of market participants concerning their continuation or alteration.
defines
Forecasting
An estimate of the variability inherent in a statistical forecast.
defines
standard error of forecast
A statistical method that examines the relationship between one or more independent variables and a dependent variable. x models can be used to examine the structure of a relationship or to forecast dependent variable values. Simple linear x has one independent variable, whereas multiple linear x includes more than one independent variable.
defines
Regression
Regression Analysis
The variable being estimated (outcome or response variable) in a predictive model such as a multiple
linear regression equation.
defines
Dependent Variable
A type of statistical analysis used to investigate a linear relationship between a dependent variable
and one or more independent variables; used to predict the value of the dependent variable on the basis of the values of the independent variables and to develop an understanding of how a unit change in an independent variable relates to change in the dependent variable. xx models employing a single independent variable are called simple linear regression models. Those employing more than one independent variable are called multiple xx models.
Linear Degression
The x calculated by the x algorithm for the data supplied that, when multiplied by the value of the variable with which it is associated, will predict (for simple regression) or help to predict (for multiple regression) the value of the dependent variable.
For example, in the equation, Value = $10,000 + $5,000 x number of rooms, $5,000 is a regression coefficient for number of rooms.
coefficient
regression
Regression coefficient
The line on a graph that represents the relationship defined by the regression coefficients.
defines
Regression Line
For example, the line from the relationship given in the definition of regression coefficient would cross the y-axis at the value $10,000 and would go up by $5,000 for each additional room.
A statistic indicating the proportion of the total variance in the dependent variable accounted for by
the independent variable in a simple linear regression equation (one independent variable). Also identified as R-squared in many statistics software programs.
Defines
Coefficient of Determination
The coefficient of determination is represented by the symbol “r2” (pronounced R-squared).
The x the r , the better; it measures how well the regression line fits the data. If r is equal to .70, that means that x% of the variation is explained by that variable. The remaining variation is always 1-r2 . In this case, it would be
1 - .30, or 30%.
higher
70
Linear regression looks at whether x variables have a x relationship.
two
linear
A technique for analyzing the relationship between one dependent (outcome) variable and more than one independent (explanatory or predictor) variable.
defines
Multi Regression Analysis
In statistics, the unexplained or random aspect of a relationship among variables. Random x occurs when a relationship is not deterministic.
defines
Error
The difference between a sample statistic and the true population parameter.
Defines
Sampling Error
A categorical variable indicating rank order, such as small, medium, and large; contrasts with nominal
categorical variables, which do not indicate rank order.
Defines
Ordinal Variable
Examples for Independent Variables
size in SF
Prices per ac
patio or not
or scales like 5 for excellent, 4 for good, 3 for average…
