Case Assignment #2

ANALYTICS REPORT TO: E. AND J. GALLO WINERY FROM: MADDY RAKER SUBJECT: CASE ASSIGNMENT 2 WINE DATA ANALYSIS DATE: DECEMBER 4, 2023 Introduction In this case analysis, I analyzed data regarding the correlation of ratings and prices of 4 different wine types. I analyzed average wine prices and ratings and how those were impacted by different variables such as the year the wine was produced, the wine rating, and the number of ratings. Overall, I determined that the year the wine was produced, and the ratings have significant impacts to the price of wine. In this cast study I will be detailing how I came to this conclusion and analysis of my findings through a scatterplot, bar graph, regression and correlation models. Data Analysis Correlations and Scatterplots Red Wine The correlation between rating and price is 0.45. This is indicating a moderate positive relationship. From the scatterplot there does seem to be some relationship between rating and price, but it does not appear linear, but some a type of curve that is increasing in steepness. White Wine The correlation between rating and price is 0.46. This is indicating a moderate positive relationship. From the scatterplot there does seem to be some relationship between rating and price, but it does not appear linear, but some a type of curve that is increasing in steepness. Rose Wine The correlation between rating and price is 0.43. This is indicating a moderate positive relationship. From the scatterplot there does seem to be some relationship between rating and price, but it does not appear linear, but some a type of curve that is increasing in steepness. Sparkling Wine The correlation between rating and price is 0.73. This is indicating a positive relationship. From the scatterplot there does seem to be some relationship between rating and price, but it does not appear linear, but some a type of curve that is increasing in steepness. Overall Regression Model

Regression Equation 𝑃?𝑖𝑐? ̂ = 11435.94 + 88.04(𝑅𝑎?𝑖??) − 0.0023(# ?? ?𝑎?𝑖???) − 5.83(𝑦?𝑎?) R 2 Interpretation # from Excel*100% of the variation in y-variable is accounted for by variation in x-variables. 26.18% of the variation in wine price is accounted for the variation in wine rating, number of ratings, and year produced. Rating H 0 : wine rating does not significantly impact wine price H A : wine rating significantly impacts wine price Because the p-value = 0 is less than our significance level of 0.05, we can reject the null hypothesis and can conclude that wine rating significantly impact wine price. As rating increases by 1 star, the price increases by $88.04, on average and all else constant. Number of Ratings H 0 : number of wine ratings does not significantly impact wine price H A : number of wine ratings significantly impacts wine price Because the p-value = 0.002 is less than our significance level of 0.05, we can reject the null hypothesis and can conclude that number of ratings significantly impact wine price. As number of ratings increases by 1 rating, the price decreases by less than 1 cent (0.002), on average and all else constant. Year Produced H 0 : Year the wine was produced does not significantly impact wine price H A : Year the wine was produced significantly impacts wine price Because the p-value = 3.96 is greater than our significance level of 0.05, we cannot reject the null hypothesis and accept the alternative that year produced does not significantly impact wine price. As year produced increases by 1 year, the price decreases by $5.82, on average and all else constant. Effect of Rating on Price by Wine Type Red Wine: As rating increases by 1 star, the price increases by $124.42, on average and all else constant. White Wine: As rating increases by 1 star, the price increases by $54.37, on average and all else constant.

Rating vs. Price for Red Wines Rating vs Price for White Wines SUMMARY OUTPUT Regression Statistics Multiple R 0.511683823 R Square 0.261820335 Adjusted R Square 0.261650898 Standard Error 62.41988222 Observations 13074 ANOVA df SS MS F Significance F Regression 3 18061872.6 6020624.199 1545.238891 0 Residual 13070 50923878.97 3896.241696 Total 13073 68985751.56 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 11435.93862 364.5903182 31.36654498 2.7373E-208 10721.28854 12150.58869 Rating 88.04157076 1.949455782 45.1621276 0 84.22035377 91.86278775 NumberOfRatings -0.002299891 0.000746424 -3.081210675 0.002065892 -0.003762992 -0.00083679 Year -5.825898609 0.179578046 -32.44215385 3.9567E-222 -6.17789771 -5.473899509 Maddy Raker SUMMARY OUTPUT Regression Statistics Multiple R 0.451358439 R Square 0.20372444 Adjusted R Square 0.203632396 Standard Error 75.84049633 Observations 8653 ANOVA df SS MS F Significance F Regression 1 12730585.91 12730585.91 2213.329431 0 Residual 8651 49758656.43 5751.780884 Total 8652 62489242.34 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -444.8646665 10.32068212 -43.10419228 0 -465.0956623 -424.6336708 Rating 124.4184184 2.644610067 47.04603523 0 119.2343526 129.6024842 Maddy Raker

Rating vs Price for Rose Wine Rating vs Price for Sparkling Wine SUMMARY OUTPUT Regression Statistics Multiple R 0.465501292 R Square 0.216691453 Adjusted R Square 0.216482682 Standard Error 27.39960273 Observations 3754 ANOVA df SS MS F Significance F Regression 1 779220.3348 779220.3348 1037.938796 2.9141E-201 Residual 3752 2816769.839 750.7382299 Total 3753 3595990.173 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -186.9864342 6.46012126 -28.94472514 1.8883E-166 -199.6521251 -174.3207434 Rating 54.37107679 1.687648747 32.21705754 2.9141E-201 51.06227864 57.67987493 Maddy Raker SUMMARY OUTPUT Regression Statistics Multiple R 0.433298274 R Square 0.187747394 Adjusted R Square 0.185659341 Standard Error 14.5666603 Observations 391 ANOVA df SS MS F Significance F Regression 1 19078.85869 19078.85869 89.91505344 2.5127E-19 Residual 389 82540.97335 212.1875922 Total 390 101619.832 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -83.00522338 10.10969295 -8.210459384 3.28189E-15 -102.8816993 -63.1287475 Rating 25.54534805 2.693987777 9.482354847 2.5127E-19 20.2487497 30.84194641 Maddy Raker