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Price Prediction Using Machine Learning Methods on the European Market of Used Cars
Dvořáček, Petr ; Baruník, Jozef (advisor) ; Vácha, Lukáš (referee)
This master's thesis proposes accurate predictions of the prices of used cars. It builds its fundamentals on the available research and broadens the academic literature by applying several modern techniques to the European market. Us- ing machine learning models and unique data, high accuracy of predictions was obtained. The precise prediction of the residual value of a used car might benefit both the buyers and the sellers, and also reduce market inefficiencies. We are not aware of any similar work in the particular field focusing on the European market. An application programming interface (API) was exploited in order to col- lect the data. Therefore, a large set of data consisting of 221,704 used car classifieds was gathered and used in various models (MLR, PCR, LASSO, De- cision Tree, Random Forests, and ANNs). This study aims to find the most precise model for estimating the prices of used cars with the help of several performance statistics (R2, RMSE, and MAE). We support the available lit- erature as the random forest approach provided the highest accuracy when predicting the used car prices. A model using ANNs seemed to be the second best in terms of predictive performances, however, required comparably much more computing power. The effects of various attributes of used vehicles on their...
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Factors affecting the price of a used car in Czechia
Dvořáček, Petr ; Polák, Petr (advisor) ; Šťastná, Lenka (referee)
The market of used cars in Czechia, generating an annual turnover over one hundred billion Czech crowns, is visited by hundreds of thousands of people a year and a similar number of used vehicles are sold there. This work tries to find and appropriately evaluate the main determinants that set the price of a used car in Czechia, and thus, among other things, increase buyers' awareness. Multiple linear regression (MLR) and the ordinary least squares (OLS) method were used to estimate coefficients indicating the effect of a given variable on the price. This study uses a unique dataset, which was obtained from the Czech online marketplace advertising used cars Sauto.cz, containing all available information about more than 55 thousand used cars from 34 different car manufacturers. According to the assumptions, the importance and negative effect of variables indicating the number of kilometers driven and the age on the price of the used car was confirmed. Other important parameters that, on the other hand, have a positive influence on the price of a used car are the elements of additional equipment. Higher price of used cars from German manufacturers compared to competing manufacturers was also confirmed and, conversely, cars from carmakers from America or Asia were found cheaper. As a huge number of...
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