The classical stochastic model of cosmology recently developed by us is reconsidered. In that approach the parameterw defined by the equation of statep = wp was taken to be fluctuating with mean zero and we compared the theoretical probability distribution function (PDF) for the Hubble parameter with observational data corresponding to a universe with matter and vacuum energy. Even though qualitative agreement between the two was obtained, an attempt is herein made to introduce a more realistic assumption for the mean ofw and use it for the calculations. In the present theory the mean values of bothp andw are taken to be nonzero. The theoretical and observational PDFs are compared for different epochs and values of the Hubble parameter. The corresponding values of the diffusion constantD obtained are approximately constant. We use the scatter in the observed redshift-magnitude data of Type Ia supernova to place limits on the stochastic variation in expansion rate and consequently, on the stochastic variation of the equation of state.