Managerial Economics

Written Assignment: Economic Report

This assignment will provide an opportunity for students to research the housing prices for five Australian capital cities, Sydney, Melbourne, Brisbane, Adelaide, and Perth. The assignment requires you to download data, analyse the data and comment on the Australian housing market from 1986 to 2005 in the five cities.

Data source for housing prices in Australia

Go to the Australian Bureau of Statistics web site through the Deakin University Library web site. Or you can follow the link provided below:
http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6416.0Mar%202014?OpenDocument#Time

The above link will take you to the following catalogue page: 6416.0 Residential Property Price Indexes: Eight Capital Cities

Please download Table 9: Established House Price Index, Index NumbersPre-September Quarter 2005 Methodology

Note that the above data is reported in quarterly frequency. Extract the required data for the above five capital cities.

Analysis

In order to do the analysis, it is expected that you will apply economic concepts learned in the unit. In particular, you will need to apply concepts learned in weeks 1 to 5 (Microeconomic analysis) and in weeks 6 to 8 (Macroeconomic analysis), and use them to explain what is currently happening in the Australian housing market.

Part I

a) Present the data in a table and in a line graph, correctly titled and sourced.

b) Comment on the changes in the prices for the market for each of the five cities, and compare between cities, over this period. Discuss at least three possible economic factors affecting either demand or supply of house prices in general, using knowledge you have learned in this unit, with particular reference to Demand and Supply and Elasticity.

c) Draw a hypothetical Demand and Supply diagram of the housing market in equilibrium. Explain what you understand by the term "market in equilibrium".

Use the three factors identified in part (b) and using three separate graphs, show how changes in those factors have affected the market price and quantity.

Part II

a) Collect data on economic growth[2], unemployment rate[3] and inflation rate[4] for Australia from 1986 to 2005. Present this in a table and in a line graph.

b) Comment on how the Australian economy has been performing for the period. Discuss possible macroeconomic reasons for the movements in variables outlined in a) above.

c) Compare the data from Part I a) and Part II a), explain if there is a relationship between the changes in the house prices and the other macroeconomic variables in the same period. Give reasons for your answer.

Presentation and Referencing:

Answers should be presented in a report like manner, with a cover page, introduction and conclusion written in full paragraphs, which have been checked for grammar and spelling. All Tables & Graphs should be properly named and labelled. Where multiple graphs are shown on the same axis these should be clearly distinguishable.

All sources should be fully referenced including sources for tables and charts and date of access for online material. Your assignment will include a Bibliography and Appendices. If you are unsure about referencing, the library has useful information on referencing at:

http:/www.deakin.edu.au/current-students/study-support/study-skills/handouts/refer-plag.php