House prices and floor area in Palmerston North
Explain that it is easiest to form a prediction interval using the transformed variables (using the methods described in the previous section) then apply the inverse transformation to the end-points of the interval.
The red bands show 95% prediction intervals. (The grey band is a 95% confidence interval for the mean weight.)
When back-transformed, the prediction intervals for Y can vary substantially in width.
Use the slider to see the prediction intervals on the transformed and untransformed axes.
The data set contains the sale prices ($thousand) and floor areas (square metres) from a sample of 143 houses that were sold in two suburbs of Palmerston North, New Zealand in 1999. All houses had been built in the previous 30 years.