Description: NAME: Diamond Ring Pricing Using Linear Regression
TYPE: Random sample
SIZE: 48 observations, 2 variables
This dataset contains the prices of ladies' diamond rings and the carat
size of their diamond stones. The rings are made with gold of 20
carats purity and are each mounted with a single diamond stone.
The source of the data is a full page advertisement placed in the
_Straits Times_ newspaper issue of February 29, 1992, by a
Singapore-based retailer of diamond jewelry.
6 - 8 Size of diamond in carats (1 carat = .2 gram)
16 - 19 Price of ring in Singapore dollars
Values are aligned and delimited by blanks. There are no missing values.
STORY BEHIND THE DATA:
Data presented in a newspaper advertisement suggest the use of simple
linear regression to relate the prices of diamond rings to the weights
of their diamond stones. The intercept of the resulting regression
line is negative and significantly different from zero. This finding
raises questions about an assumed pricing mechanism and motivates
consideration of remedial actions.
This dataset can be used to illustrate model-building in linear
regression. A possibly counter-intuitive negative intercept may be
avoided by using a multiplicative or exponential regression model.
These regression models are intrinsically linear, and they are
estimated using standard linear regression technology after a suitable
transformation of the data.
Additional information about these data can be found in the "Datasets
and Stories" article "Diamond Ring Pricing Using Linear Regression" in
the _Journal of Statistics Education_ (Chu 1996).
Department of Decision Sciences
National University of Singapore
10 Kent Ridge Crescent