Final Assignment Cristina Aurrecoechea Fall 2005

# Predicting first class postage stamp prices

We use the updated stamp.data file provided in Assignment 12. We plot data and develop a prediction function. When will cost reach 1\$? When will cost reach 64 cents? How soon should we expect the next 3 cents increase?

My current work is in this file. I need to "translate" the information generated from the excel sheet into this write up. The prediction functions predict increments by year, but the reality is that the increments will happen every 3 years approx, by looking at trend.

- Copy table with years and stamp values.

- Plot the numbers, add trendline: power and exponential seem similar.

- I use growth function provided by excel (I think it does exponential, not sure). It estimates next increment next year 2007 of 5 cents; we will reach 64 cents in 2014 and 1 dollar in year 2025.

- I eliminate the first data because it probably distorts prediction. I use growth function eliminating first 4 data rows. This way the 1 dollar is reached in 2030. But I dont understand the sudden increase the first year 2007 to 50 cents and then slow increase. What is wrong??

- I elminate those first 2 or 3 points and make a chart with linear approx, I get a function and plot the values in E column. It looks good in chart, and it basically assumes there is going to be 1 cent increment per year for ever, but that is not realistic. 3 cents in 3 years seems okay now but soon it will be 5 cents in 3 years..... I still have to find a solution

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