Regression of the Diamond Data

In this activity, you will be performing a linear regression analysis to see if diamond prices (in Singapore dollars) from the Singapore diamond exchange can be predicted from the weight of diamonds in grams.

Though it seems intuitively obvious that the bigger the diamond, the more it will cost, there are other factors that can influence the value just as much as size, such as if the diamonds are not already expertly cut and of high quality in terms of their clarity and color.

Using the data set in Excel, perform a linear regression to determine if there is a substantial correlation between the weight and value of a diamond and if predicting diamond prices from their weight is a viable option in the context of the Singapore diamond exchange.

Create an APA-formatted figure that includes a scatterplot and regression line and displays the equation of the regression line and the R-squared value. Remember to label the axes appropriately and include the units. Answer the questions below; reading the two discussion pages on linear regression analysis may be helpful.

1. Are there any data points which seems to be unusually distant from the least squares regression line?
2. If so, why do you suppose that might be?
3. What is the name of the r-value from a linear regression data analysis?
4. What is the r-value for this specific data set?
5. What is the regression equation for this specific data set?
6. What percentage of the variation in price is predicted by the weight of a diamond in this specific data set?
7. What is the name of the variable that gives you the value requested in question six?

8. Using the regression line equation from this specific data set, do you think you could, on average, predict the price of a diamond sold at the Singapore diamond exchange within ten percentage of its value when given the weight?
9. Explain your answer to number eight.

Original work on this document was done by Central Virginia Governor's School students Stephanie Mayer, Teona Callaham, and Nam Tran (Class of '98).

Copyright © 2011 Central Virginia Governor's School for Science and Technology Lynchburg, VA