Problem
I. Differentiate between the terms interpolation and extrapolation. What is spatial interpolation? Also, differentiate between global and local approaches and provide an example from real estate where the global approach would provide inferior understanding about real estate data analysis (example housing and vintage)
II. Real estate data analytics exploits the notion of spatial dependency since location matters and location proximity is always followed by value proximity. In this context describe what is a semi variogram? Define a sill, range and nugget
III. Define the inverse distance weighting (IDW) method of spatial interpolation. Let's assume (????) which (i=1,2,3 &4) represents the prices of homes ($000) in a neighborhood in figure 1 (see attached excel file). Also, dio represents the distance between property xo and the other four properties Utilize the inverse distance weighting method to compute the predicted price of the home located at ??0.