Determinants of 2003 Ford Taurus Auction

Prices

Presented by:Brandon Briggs, Samantha Gardner,

Brett Hanifin, Dane Louvier, Ali Irturk, Ryan Nabinger

Introduction What goes into the auction price of a car?

Data Set We examined the auction prices of 19,704

2003 Ford Taurus. All data was from individual auction

records from Aucnet. Mileage Trim package Location Sale type Sale month

Data Set Mileage – Numerical Variable Trim Package – Dummy Variables

SE, LX, SES, SEL Location – Dummy Variables

West, Middle, East Sale Type – Dummy Variables

As is, Reposessions, Dealer, Fleet, Manufacturer

Sale Month – Dummy Variables Jan 06 – Nov 06

Descriptive Statistics  Price Mileage trimSE trimSES trimSEL trimLX

Mean 6,194 57,757 0.5903 0.3322 0.0486 0.0289

Standard Error 12 177 0.0035 0.0034 0.0015 0.0012

Median 6200 55135 1 0 0 0

Mode 6000 66270 1 0 0 0

Standard Deviation 1638 24775 0.4918 0.4710 0.2150 0.1675

Sample Variance 2684276 613799696 0.2419 0.2219 0.0462 0.0281

Kurtosis -0.2235 1.2503 -1.8652 -1.4924 15.6363 29.6527

Skewness -0.0787 0.7796 -0.3674 0.7126 4.1994 5.6258

Range 12700 209322 1 1 1 1

Minimum 1000 1185 0 0 0 0

Maximum 13700 210507 1 1 1 1

Sum 121996754 1137575658 11627 6543 957 569

Count 19696 19696 19696 19696 19696 19696

Descriptive Statistics  Asis Dealer Fleetlease Manuf Repo West Middle East

Mean 0.0008 0.2503 0.7335 0.0062 0.0091 0.1492 0.4128 0.4381

Standard Error 0.0002 0.0031 0.0032 0.0006 0.0007 0.0025 0.0035 0.0035

Median 0 0 1 0 0 0 0 0

Mode 0 0 1 0 0 0 0 0

Standard Deviation 0.0285 0.4332 0.4421 0.0788 0.0952 0.3563 0.4923 0.4962

Sample Variance 0.0008 0.1876 0.1955 0.0062 0.0091 0.1269 0.2424 0.2462

Kurtosis 1226.3124 -0.6701 -0.8836 155.1761 104.4583 1.8800 -1.8746 -1.9378

Skewness 35.0455 1.1532 -1.0566 12.5364 10.3173 1.9697 0.3544 0.2497

Range 1 1 1 1 1 1 1 1

Minimum 0 0 0 0 0 0 0 0

Maximum 1 1 1 1 1 1 1 1

Sum 16 4929 14448 123 180 2938 8130 8628

Count 19696 19696 19696 19696 19696 19696 19696 19696

Exploratory Data Analysis

-10000

-5000

0

5000

10000

15000

5000 10000 15000

Residual Actual Fitted

Exploratory Data Analysis

0

1000

2000

3000

4000

5000

6000

-6000 -4000 -2000 0 2000 4000 6000

Series: ResidualsSample 1 19696Observations 19696

Mean -9.76E-09Median 89.48959Maximum 6414.631Minimum -6560.972Std. Dev. 884.2771Skewness -1.144532Kurtosis 7.260360

Jarque-Bera 19195.79Probability 0.000000

Percentage of Total Sales by Month

0%

2%

4%

6%

8%

10%

12%

14%

16%

Jan Feb Mar Apr May June July Aug Sept Oct Nov

Percentage of Total Sales by Location

14.9%

41.3%43.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

West Middle East

Percentage of Total Sales by Sale Type

0.1%

25.0%

73.4%

0.6% 0.9%0%

10%

20%

30%

40%

50%

60%

70%

80%

Asis Dealer Fleetlease Manuf Repo

Percentage of Total Sales by Trim Type

59.0%

33.2%

4.9%2.9%

0%

10%

20%

30%

40%

50%

60%

70%

trimSE trimSES trimSEL trimLX

Regression Analysis

Regression Results The F-statistic was 2393.282

P-value for F-statistic was significant at 5% level

T-Statistics for manufacturers, repossessions, May, July, and August were not significant at the 5% level

Regression Results Sale Type – Lowest to Highest

As is Manufacture (statistically insignificant) Fleet lease Reposessions (statistically insignificant) Dealer

Sale Month Later months decrease price more than earlier

months

Regression Results

Seasonality of Taurus Auction Price

-$800

-$600

-$400

-$200

$0

$200

$400

$600

Jan Feb Mar Apr May June July Aug Sept Nov

Sale Month

Co

effi

cien

t

Regression Results Mileage decreases auction price Trim type – Lowest to Highest

LX SE SES SEL

Location – Lowest to Highest West East Middle

Price as a Function of Mileage