DATA, INSIGHTS, AND DECISION
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COMM1190: DATA, INSIGHTS, AND DECISION
QUESTION 1
You have been brought in as a Data Science consultant on a court case. A chemical company
has been found negligent after a chemical spill at one of their plants. All that remains in the
court case is to decide on the extent of the damages for which the company is liable. One way
the court has been deciding on this amount is to look at the impact the spill has had on the
value of houses located near to the chemical plant where the spill occurred.
As the expert witness, you have been asked to evaluate some alternative strategies to
estimate the impact on housing prices (price). Strategy A involves taking a sample of sales
that occurred after the spill where the houses are classified as either being close to the plant
or not. This feature was designated by a variable near that was equal to 1 if the house was
deemed to be close to the chemical plant and zero otherwise. Then a regression analysis is
performed using the following model (MA):
: = 0 + 1 + .
Strategy B involves taking a sample of sales for houses near to the plant but where some
sales occurred before the spill and some after. The variable after is equal to 1 if the house
was sold after the spill and zero if the sale was before. Then a regression analysis is
performed using the following model (MB):
: = 0 + 1 + .
Part A.
Explain A and B as strategies to estimate the impact of the chemical spill and critically
evaluate each of them. Is either preferable to the other?
Part B.
Suggest an alternative regression model that is preferable to given that you only have data
from after the spill. Does this address all your criticisms of Strategy A that you outlined in part
(a)?
Part C.
Using housing data models MA and MB are estimated, and the results given below. How do
you interpret these results? (Note that is expressed in $1000)
� = 131.9 (4.0)− 40.0(7.6)
= 142, 2 = .165, ( . )
� = 63.7 (5.9)+ 28.3(9.1)
= 96, 2 = .094, ( . )
Part D.
Suppose you have sales both near and not near to the plant as well as sales before and after
the spill. Suggest an alternative strategy to estimate the effect of the oil spill on housing prices
that is preferable to both MA and MB?
Word Limit: 800 words for entire question (i.e., all subparts).
QUESTION 2
Imagine you work for a large department store, which highly values customer service. The
following chart shows how customers contact the customer service centres.
You begin to discuss the chart with your manager. Immediately, she has the following queries:
“I want to see the overall trends, but it is difficult to see with all the seasonal spikes in the time
series. I’d like a simpler view into the trend.” You decide to create some charts to address your
manager’s queries.
Part A.
Using the four frameworks typology, identify the type of chart you would use to address the
query and explain why.