Analysis of Econometrics : Assignment

Running head: DATA ANALYSIS OF ECONOMETRICS
Data Analysis of Econometrics
Name of the University:
Name of the Student:
Author’s Note:

DATA ANALYSIS OF ECONOMETRICS 1
Executive Summary:
The report describes economic skills with the help of regression analysis. We answered three
questions and their subparts. We have provided the necessary calculations and tables. We
interpreted from the analysis with the help of MS Office, Minitab and R. We finally have
drawn the conclusions from each question.

DATA ANALYSIS OF ECONOMETRICS 2
Table of Contents
Introduction:...............................................................................................................................3
Questions and Answers:.............................................................................................................3
Question A.............................................................................................................................3
Question B..............................................................................................................................6
Question C............................................................................................................................23
Conclusion:..............................................................................................................................29
Bibliography List:....................................................................................................................30

DATA ANALYSIS OF ECONOMETRICS 3
Introduction:
We described here the group-survey of Australian data of different cities. The answers
of three questions are provided in the analysis. We derived the comparative study of different
Australian cities in the first part. In the second part, we calculated the analysis of economic
situation and relation of chosen three sectors. In the third part, we analyzed the data of age,
average hourly earnings and different factors.
We have elaborately analyzed the dataset with the help of MS Office, Minitab and R.
We installed add-ins in MS excel for advance analysis (Slazek et al. 2013). The report would
help the economic investigators of Australia.
Data analysis on econometrics in this report shows the overview of three different
segments of economics in this report.
Questions and Answers:
Question A (Australian House Price Index):
A1.

DATA ANALYSIS OF ECONOMETRICS 4
Table 1: Compound Annual Growth Rates of Various Australian Cities.
A2.
The city with the lowest growth is Perth at 0.89% in 2007-2016 and the city with the
highest growth is Sydney with 7.28% as shown in the 2013-2016.
A3.
SYDNEY:
The monthly payments are considered as PMT, as the loan is a collection of an annual
interest rate. The periodic payment where in this case the payments are paid monthly.
According to the assignment, the principal amount of Sydney is given as $608768.
To calculate PMT,
PMT = PV * [i / {1 - (1 + i)-n}]
Where, i = 0.5% (compounded monthly from 6%), t = 300 (300 months within 25
years since we are compounded monthly), PV = 608768(675000 – (20% * 675000))
PMT = $608768[0.5% / {1 – (1 + 0.5%)-300}] = $3922.300115
The amount needed to pay back is a total of $3922.3 per month.
A4.

DATA ANALYSIS OF ECONOMETRICS 5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Principal Amount
Interest Amount of SYDNEY
Figure 1: An Area Diagram shows the comparison between Principal Amount and
Percentage of Interest of Sydney.
The following figures are based off 24th month on data attached
Interest paid = $2937.057583
Principal Paid = $985.2346406
Total = $(2937.05+985.234) = $3922.3 = $3922.3
Percentage of payment paid to principal = 25.12%
A5.
The total amount of interest that will end up paying is = $567922.2263
The figure of total amount of interest is based on the appropriate calculation that also
includes all interest earning.
A6.
In the assignment,

DATA ANALYSIS OF ECONOMETRICS 6
Sydney House Price: $675000
CAGR: 5.05%
Year 25: FV = Current Value*(1+r) n = 675000(1+5.05%) 25 = $2314128.793
House Appreciation = Future Value of House Price – Current Value of House Price
= 2314128.793 – 675000 = $1639128.793
As, $1639128.793 > $567922.2263; Therefore, we can say that, House Appreciation
> Total Interest Paid.
From our above calculation, we can conclude that the value of the house is greater
than the interest paid thus the value appreciation is sufficient to cover the total interest paid.
Question B.
The three chosen securities are industrial in Mix. And Fix., consumer services in
travel and tourism and healthcare providers. The value of ri in the industrial, consumer
services and Healthcare services are calculated separately.
B1.
A. Orthogonal Least Square (OLS) model of Adelaide Brighton (Market Value and
Stock Value):

DATA ANALYSIS OF ECONOMETRICS 7
Table 2: Orthogonal Least Square regression model of Adelaide Brighton
-0.06 -0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1
-2
-1.5
-1
-0.5
0
0.5
1
1.5
Adelaide Brighton Residual Plot
Residuals
Figure 2: Residual Plot of Adelaide Brighton