Assignment 1: US Home Resales Data
The data corresponding to this assignment is given in file
“Homeresales.txt”, which
you can download from Blackboard (under Session 8). The data
is in free-format and the only
variable is the monthly time-series (January 1989 through
February 2003; 170 observations)
of the Home Resales in US.
In performing any statistical analysis, please use SAS PROC
REG and a 5% level of
(a) Look at a time-series plot of the data and using the
plot discuss any seasonal
behavior that you can observe from the data. Obtain box
plots for each month using SAS and
using the plot discuss at which months the home resales peak
and drop.
Is there any evidence of changing variability in the resales
based on the plots that you
have obtained ? Please discuss your reasoning.
(b) Create the necessary monthly seasonal indicators and a
time index to develop a
seasonal model using December as the reference month. That
is, in addition to the seasonal
indicators, include also a first order (linear) time trend
component in your model to capture
possible trend in the data.
Estimate the model and identify the statistically
significant components of the model.
HINT: If there is any evidence of changing variability in
the resales, then use a log
transformation of the data.
(c) Using the output discuss interpretation of the constant
(intercept) term and the
coefficients for January and November.
(d) Based on your analysis, would you conclude that there
exists seasonality in the
home resales? Would you conclude that there is an upward
trend in the home resales ?
(e) Test the hypothesis that June and July coefficients are
equal to each other in your
model and briefly describe your findings. HINT: You can use
TEST statement for this
(f) Obtain a time series plot of actual versus predicted
home resales based on your
model. What percent of the variation in the home resales is
explained by your model ?
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