Re: 'trend value' formula needed


"Nick" <tulse04-news1@xxxxxxxxxxx> wrote in message
news:m9CdnT6D4LPfRj3YRVnysQA@xxxxxxxxx

"khany" <sharif.khan@xxxxxxxxx> wrote in message
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matt271829-news@xxxxxxxxxxx wrote:
khany wrote:

matt271829-news@xxxxxxxxxxx wrote:
khany wrote:

Hi all,

hope this isn't too off-topic but i could really do with some help

i have, say, at least 5 records with 3 columns of data based on
industry activity (so
not pre-determined by me)

the values of the first 2 columns roughly reflect the value of the
third.

i want to be able to pass in 2 arbitrary values for the first 2
columns
and get a trend/predicted value for the third back.

eg. some records I already have:

A:22000, B:24, C: 5000
A:36000, B:35, C: 3200
A:56000, B:43, C: 1800

so as A and B increase (not directly related) C decreases.

So if I pass in A:39000 and B:37 what would C be? more
importantly,
whats the formula?

thanks in advance

khany

So, you have two variables A and B, and you think that C is
approximately determined by A and B. Based on the data you have, you
want to find an equation "C = some calculation involving A and B"
that
gives the best prediction of C. There is no "formula" that will
magically do this for you in all cases; instead there are
techniques,
which generally come under the name of "regression analysis"
(Googling
this should throw up plenty of info).

However, if you know, or can reasonably assume, that the
"calculation
involving A and B" approximately follows some particular form - for
example C = p*A + q*B + r for some numbers p, q and r to be
determined
- then life is potentially easier. Do you have an idea about what
the
nature of relationship between A, B and C ought to be, or are you in
the dark? (Knowing that C decreases as A and B increase is not
really
specific enough; it could decrease with A and B in any of
innumerable
ways.)

OK, I can see I need to pass more information to you all. I really
appreciate this.

The records represent cars that have sold and column A is the mileage
of the car and B is the number of months old the car is at the point
of
sale. So based on existing records, I want to pass mileage and age and
receive in return an approximate value or even value range (high|low).

hope this helps

I assume that you also know the make and model and, in particular, the
original price of the car when it was new. (If not then any attempt to
calculate value from age and mileage alone will result in completely
meaningless numbers.)

I think your best bet is to try to find out how the motor industry does
this. There may be standard formulas that everyone uses. Then do a
sanity check that these are an acceptable match with the data you have,
and tweak if necessary.

I really know nothing about the used car trade, but for an
average-mileage vehicle, as a first guess, it seems not unreasonable
that resale_price = original_price * (1 - yearly_depreciation_rate) ^
age. You would need to figure out the depreciation rate, which I
suspect might vary significantly with model. You might find published
estimates of depreciation rates, and/or infer them from your data,
provided you have enough of it. Then you would need to adjust somehow
for above-average or below-average mileage. Not quite sure how that
would work. But, as I say, I'm just guessing, and finding out what
method the experts use would be the way to go I think.

The problem with the industry figures i was using was that they were
out, way out, and so i wanted to find a statistical way of determining

Are these standard industry figures? What do you mean when you say that
the figures are "out, way out"? Do you mean that your figures differ
substantially from them?

the information. you're right about determining the depreciation index
but i was hoping the data itself could establish that.

actually, that could be the key. most cars have a half life value of
about 3 years. if the data could establish the dep index then perhaps
your formula might work.

i see this as a three dimensional graph. x = age, y = mileage and z =
value. any ideas how to apply a formula like this?

Nick

Try also sci.stat.math.

Nick


.

Relevant Pages

  • Re: trend value formula needed
    ... The records represent cars that have sold and column A is the mileage ... of the car and B is the number of months old the car is at the point of ... calculate value from age and mileage alone will result in completely ... You would need to figure out the depreciation rate, ...
    (sci.math)
  • Re: trend value formula needed
    ... The records represent cars that have sold and column A is the mileage ... of the car and B is the number of months old the car is at the point of ... calculate value from age and mileage alone will result in completely ... The problem with the industry figures i was using was that they were ...
    (sci.math)
  • Re: trend value formula needed
    ... The records represent cars that have sold and column A is the mileage ... of the car and B is the number of months old the car is at the point of ... calculate value from age and mileage alone will result in completely ... You would need to figure out the depreciation rate, ...
    (sci.math)
  • Re: trend value formula needed
    ... khany wrote: ... The records represent cars that have sold and column A is the mileage ... of the car and B is the number of months old the car is at the point of ... calculate value from age and mileage alone will result in completely ...
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