Prices of second-hand Mazda cars

Use this example to explain that:

Drag the red line on the vertical axis upwards to apply a power transformation to the price.

A log transformation linearises the relationship and also gives residuals with fairly constant spread.

Fortunately, the same transformation of the response that linearises the relationship often also results in fairly constant error standard deviation.


The data set contains the retail prices and ages of 124 Mazda cars, obtained from the newspaper The Melbourne Age on 8 February 1992.