ETC1000 Business and Economic Statistics

Group Project
Semester 2 2019

A. How it works
• This project will be undertaken in small groups, involving analysis of a set of data using the
approaches to quantitative problems you will learn in this unit.
• The final product will be a group presentation during your Tutorial class in Week 11.
• Groups will be allocated in the Tutorial in Week 4 of semester. All group members will be enrolled
in the same class. There will be 3 – 4 members to each group.
• The project is worth 16% of your final mark.
• The project is assessed based on the quality and content of your presentation slides (PowerPoint
or equivalent) and your oral presentation.
• All group members must contribute to the oral presentation. There will also be opportunity to
give feedback on the contributions of other members of your group, and this feedback will be
taken into account when allocating the final mark for this assessment.
• N.B. The Exam for this semester will mostly use the same dataset and explore similar issues.

B. The Topic

1. Context: Poverty in Australia

Have a look at this short video to get some historical context to this topic:
https://www.youtube.com/watch?v=bx0IeQQ7WjI
Despite being a rich country, Australia still has number of people and families who are classified as
“poor”. In this project, you will look at some data on incomes and calculate poverty rates for different
types of households. You will then design a welfare transfer scheme that would remove poverty from
those households who are currently classified as poor. You will need to assess the cost of this welfare
scheme, and examine whether it is affordable, by an increased tax on those earning higher incomes.

2. The Tasks
2.1 Choosing a Location
Your group will not look at poverty overall in Australia. Instead, you will look at one region or area, and
use the Census Community Profile from that area as your data source.
Download a relevant Community Profile from
https://www.abs.gov.au/websitedbs/censushome.nsf/home/communityprofiles?opendocument&navp
os=230
For Location, choose a large area like a State (e.g. Victoria), or main city (e.g. Melbourne). The data you
need to use is not available in every location (especially the smaller ones like a suburb). Download the
file called “Time Series Profile” for the area you have chosen. If there is not a “Time Series Profile”,
choose a different area until you find one that has this file.
2.2 The Community Profile Data
Once you have the Time Series Profile for your selected location, you can explore the characteristics of
the population of that location.
You can extract out a few simple facts about this population using some of the tables available in the
file. Don’t spend too long on this: just produce 2-3 slides telling us about things that might be relevant
to the topic of income and poverty.
Note that this file includes comparable information across the three most recent censuses (2006, 2011
and 2016). Make sure at least one of your pieces of background information includes a comparison
across the 3 censuses, to see if there is an interesting trend there.
Examples of some of the features of the community you might like to highlight (Don’t choose all of
these!): Indigenous status, country of birth, language spoken at home, religion, dwelling structure and
size, rents, mortgage repayments, assistance needed, labour force participation and occupation,
education qualifications, and probably more …. Don’t discuss Incomes here – that is the next section.
Hints about presentation:
When presenting information like this, it often helps to reduce the number of categories in your
slide, to make the key messages clearer. E.g. For country of birth, there are dozens of countries
listed. You could construct a table with just the 5-10 biggest ones, and an “other” category.
Similarly, this data might be better in percentages? And not separating Male and Female? Only
include the extra detail (eg Gender) when it is relevant to the purpose of your study.

2.3 Household Incomes

In order to look at household poverty among families with children, you need to focus on the tables in
your Community profile that show the distribution of incomes. The Tables to work from are titled:
• Total Family Income (weekly) by number of children for Couple Families (Table T22 usually)

• Total Family Income (weekly) by number of children for One Parent Families (Table T23 usually)

For this section, just work with the 2016 Census data.
Do some work to summarise the main information about family income given here. E.g. Show how
average incomes for single parent families compare to those with two-parent families. What are the
median incomes? How does income vary with the number of children in a household? Show
histograms of the distribution of incomes for single and two-parent families.
Hints: There are some problems with the data that you will need to address. E.g. Incomes are
not exact, they are given in ranges – “Categorical data”. But to calculate means, you need exact
values. Think of a sensible approximation to deal with this.

2.4 Poverty Lines and Calculating Poverty Rates

The official definition of Poverty involves comparing a household’s income with a Poverty Line for that
type of household. If the income is below the poverty line, they are counted as “poor”. In simple
terms, the Poverty Line for Australia is defined as 50% of the median income for households of that
type. So poverty is actually a relative measure in this case.
To get more details, access the following report:
https://www.acoss.org.au/wp-content/uploads/2018/10/ACOSS_Poverty-in-Australia-Report_Web-
Final.pdf
This report gives helpful background to the topic of poverty in Australia. You might like to use some of
this background in your presentation.

You will need to use the values See Table 2 (p. 21) of there to work out poverty lines for families
with 1, 2, 3 and 4 children. This table gives poverty lines for families with no children and two
children, but with some thought, you can estimate sensible poverty lines for the other cases.

Once poverty lines have been constructed, you next need to use the household income data
(section 2.3) to estimate the proportion of households who are below the poverty line, for each
type of household, as well as overall. This set of poverty rates will tell us the extent of poverty
in your selected location, and it will show how it varies by household type (number of parents,
number of children).

2.5 A Welfare Model

N.B. Designing a welfare system is very complex. In this task, we are doing a simple example, to
illustrate some of the ideas. It is not meant to be realistic. We also ignore some of the
disincentives that might be created by large scale transfers from “the rich” to “the poor”.

Given the data set and information you have above, your next task is to construct a social
transfer system that, if implemented, would remove poverty. The system will need to be
constructed and implemented via a Spreadsheet Model.

The welfare system would involve:

• A cash transfer to those with incomes below the poverty line, enough to increase their
incomes to just above the poverty line.
• A tax on those with incomes above the poverty line. Normally a tax is taken as a
percentage of income above some sensible threshold. Design a simple tax scheme that
can be used for this purpose.
• You will need to set the tax rate(s) so that the amount of tax collected in total equals the
amount that will need to be transferred to the poor (we ignore all administrative costs
etc). Try Goal Seek (or something similar) in Excel to help with this step.

In your presentation you can explain the design of the welfare system, and briefly discuss how
realistic you think it is.
C. The Final Product
• A maximum of 10-minute group presentation showing the results of your analysis. You will do
this presentation during your allocated tutorial class in Week 11.
• The presentation should show, in an interesting way, the main things you have done and learned
about the topic in sections 2.2 – 2.6 above.
• This presentation will need to be accompanied by a set of presentation slides.
• In addition to your group presentation, each person will be asked to do a peer review survey.
Each member will receive an email to evaluate the participation of your group members. The
penalty may apply according to the evaluation. For the further information, refer to the
instruction file and project marks discounting rules file.
• One member of your group should upload the completed slides to the Assignment section of
Moodle, AND a spreadsheet file showing the analysis you have done and the model you
developed. These files must be uploaded by Week 10 Friday (11th October) 11:59pm.
• ALL group members will also need to click the "Submit assignment" button and accept the
University's submission statement on their Moodle submission.

D. Assessment Criteria
There are three components to how we will assess your presentation, with specific criteria under each.
1. Content
1.1 Statistical analysis and Modelling were correctly implemented and explained well, with valid
interpretations.
1.2 The analysis is well linked to the overall conclusion/theme/message of the presentation.
1.3 The spreadsheet model is well laid out and clear, well designed to minimise the chance of errors.

2. Presentation
2.1 The presentation follows a logical flow
2.2 The results are interpreted correctly and conclusions are well justified
2.3 A clear and logical conclusion/theme/main-point is evident

E. Attending the Presentation

• If you cannot attend your scheduled Tutorial in Week 11, you need to contact us as a group by
the end of Week 9 with a valid explanation. Indicate all days and times your group is available
during Week 11, and we will reallocate your group to another time slot. If you have a last-minute
problem in the last days leading up to your presentation that prevents you from attending your
class, you must provide evidence and notify us as soon as possible. We will not reschedule if you
do not notify us before the day of your class.
• If you do not attend and contribute to your group presentation, you will receive zero marks for
this assessment.

For any issues regarding attending your presentation, contact us via chun.minsoo@monash.edu.