ADVANCED PROGRAM IN BANKING AND FINANCE

INTAKE 62

Coursework Assessment Brief

Module Code: Math115B

Module Title: Introductory econometrics
Submission Deadline: 11/12/2022
Assessment Component: Coursework
Assessment Weighting: 20 per cent of total module mark
This is a group assignment with a group of 4 to 5 students

Assessment Instructions

The coursework is a 1200-word statistics report (50%).

Your answers should be written on the form of a report of an empirical analysis – as though for
publication in a journal. It is an exercise in correctly reporting and interpreting the results. At
each stage you should comment on the model you have estimated. Some examples of things
that should be included are:
 Interpret the coefficients (do they have the signs you expected; are they of a reasonable
magnitude; ie. do they make sense? Remember to use the units of measurement in your
answers)
 Test your coefficients to see if they are significantly different from zero at the 5% and/or
1% level of significance using the appropriate critical-t value from a t-table.
 Possibly compute the elasticities for regressors, and comment on their relative
magnitudes
 Assess the goodness of fit of your model: R2 and “overall” F statistic (i.e. do an F test).

Include the output from R as an appendix to your report. Include any graphs as an appendix or
within the body of the report. Think carefully about the presentation of your work.

Marks will be awarded for clarity of discussion and comprehensive analysis but not for
repetition so do not laboriously give details of the t-test for every coefficient etc.

The data is found in the file “Bristol house prices” and the exercise is based on the type of work
you should have completed in the computing sessions. The file contains data about property
prices and some characteristics of the properties. Data is available for 9151 property sales in
Bristol during the years 2019 and 2020. The data has been retrieved from London Datastore:

https://data.london.gov.uk/dataset/house-price-per-square-metre-in-england-and-wales

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price Sale price in £
size Total floor area in square meters
numberrooms Number of habitable rooms
year Year when the sale was completed
age Age band when building part constructed
current_energy_efficiency Current energy rating of the property
potential_energy_efficiency Potential energy efficiency rating of the property
detached = 1 if property type: detached house
flat = 1 if property type: flats/maisonettes
postcode Postcode information of the property
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a) Explore the data characteristics

Graph the price against floor area, against number of rooms and against age, and comment on
patterns observed and likely model specifications for the relationships. Find any means,
standard deviations, correlations etc that are interesting and/or useful in the analysis. See if
there are differences in mean prices for different types of properties, like detached houses and
flats.

b) Does the amount of floor area, number of rooms, age and type of property affect the
property price?
Estimate the regression of price on the variables size, numberrooms, age, detached and flat.
Review the regression along the lines indicated in the instructions to answer this question.

c) Find a best model?

Experiment with different model specifications and find a ‘best model’. A selection of all
variables in the data set can be used. Possibly, a non-linear functional form can be applied, for
example using log-transformations, squared terms, or interactive terms. Model specification
tests can be performed and evaluated. Give your arguments for which is the best model
estimated.

d) If possible, make some comments using diagnostic test for the functional form,
multicollinearity, heteroscedasticity, normal distribution of error terms.
WORD LIMIT: No limitation
The report should be submitted before 12pm on 11th November 2022.

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Marking Criteria

The following criteria will be used in evaluating this assessment:

For the statistics report, the information and marking criteria are detailed in the explanatory
documents listed above.

Marks will be allocated on the basis of clear presentation of results and lucid explanation of the
obtained results. Few marks shall be allocated simply for obtaining ‘correct’ statistical results.
However, a high weighting will be given in the allocation of marks to evidence that you:

• understand the concepts involved;

• can justify the techniques you have used and appraise their strengths and weaknesses
(where appropriate);

• can communicate results clearly and concisely to the reader.

Presenting test results etc. in tables and figures may be very useful and can substantially help
your presentation. Tables and figures should be properly labelled. It is not recommended to cut
and paste the output of computer programmes only.

Please use the following file format(s) (Word or pdf). We cannot ensure that other formats are
compatible with markers’ software and cannot guarantee to mark incorrect formats.

All work should be word processed in 12-point font Times New Roman or Arial.

The first page of your coursework must include:

 Your team’s student list
 The module name
 The coursework title

It is an assessment offence to copy work from any source, including your own previous
assessments, and present it as your own work for this assessment, or to provide your own work
to others

Instructions for submission

You must submit your assignment before the stated deadline by electronic submission to your
class representative. Then, she arrange all work into 1 file (rar) and send to my email
thenm@neu.edu.vn

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Submissions of coursework by any other method (including a paper copy, on disk or by email)
are NOT permissible for this module unless specifically agreed in advance of the submission
date.