STATEMENT OF AUTHORSHIP

Except where reference is made in the text of the end-module assignment, this
assignment contains no material published elsewhere or extracted in whole or in part
from an assignment which I have submitted or qualified for or been awarded another
degree or diploma.
No other person’s work has been used without due acknowledgment in the end-
module assignment.
This end-module assignment has not been submitted for the evaluation of any
other modules or the award of any degree or diploma in other tertiary institutions.

Ho Chi Minh City, April 2023

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I. Introduction.

To determine the focus of their new campaign, the Bank of England CRM system
analyzes a data set. I'll use the following techniques in the study that follows to analyse
the data and determine the UK family income and spending patterns. I will then offer
some suggestions based on this study to help BoE conduct a successful loan camp.

1. Detecting outliers.

Since blank data and "0" will negatively affect the analysis results or prevent us
from producing results, I first eliminated them from the excel file.

Then, I eliminated numbers that were excessively large or small compared to the
rest using the technique of removing 5% of the outliers, namely 2.5% of the largest
numbers and 2.5% of the smallest numbers. It can result in an entirely different set of
findings.

2. Methods.

Then, to confirm my findings, I do the following tests.

 Interval estimation
 Hypothesis tests
 ANOVA analysis
 Multiple regression
 Pivot chart

3. Find goals for loan campaign + recommendations

From the above analysis, I have determined the goal of this loan campign that the BoE
should focus on for advice.

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II. THE PATTERN OF INCOME AND SPENDING OF UK HOUSEHOLDS
1. Overall analysis
1.1. The relation between regions and income
1.1.1. Pivot table and pivot chart.

Region Average of interviewee's income

North / Yorks & Humberside 30230.5

North West 29186.34004
Midlands 29071.58347
South East 26818.28668
East Anglia 27909.3941
South West 28447.7962
Wales 21755.48123
London 32361.86796
Scotland 18964.71262
Grand Total 27446.75333
Table 1.1.1: Pivot chart of average income in 9 regions

REGIONS - INCOME
35000
32361.867961165
30230.5
30000 29071.5834658188
29186.3400447427 28447.7961956522
27909.3941018767
26818.2866779089

25000
21755.4812286689

20000 18964.7126213592

15000

10000

5000

0
North / North West Midlands South East East Anglia South West Wales London Scotland
Yorks &
Humberside

Chart 1.1.2: Average income of interviewee in 9 regions

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 I deleted the missing data and the outliers (5% of the total, 2.5% of the lowest one,
and 2.5% of the highest) after collecting the information from the data file on the
interviewees' incomes (qincomefreev1) by region (dregion). I then used the pivot table
tool to get the average income for each region and used the pivot chart to explain my
findings. The results are displayed above. The aforementioned graph shows that the two
regions with the highest average income are London and the North / Yorks &
Humberside. Particularly, the London figure is the highest. I used a t-test to determine
whether Londoners' incomes are higher than those in North / Yorks & Humberside.

1.1.2. T-test

μ1: average income of London

μ2: average income of North / Yorks & Humberside
 H0: μ1 - μ2 ≤ 0
 Ha: μ1 - μ2 > 0
 α: 0.05

Income of London Income of North/ Yorks & Humberside

Mean 324606.372 29826.27616
Variance 423091876.5 344702859.5
Observations 586 583
Hypothesized Mean Difference 0
df 1080
t Stat 4.270259859
P(T<=t) one-tail 5.82440E-06
t Critical one-tail 1.828320104
P(T<=t) two-tail 1.16488E-05
t Critical two-tail 1.592347626

Based on the table, I can conclude that p < 0.05

 Reject H0 at the level of 95%

 Average income in London can be higher than North / Yorks & Humberside

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 1.2. The relation between regions and total debt in the UK
1.2.1. Pivot table

Region Average of total debt

North / Yorks and Humberside 8421.295203
North West 9068.791878
Midlands 8882.047273
South East 6742.148594
East Anglia 7711.5
South West 9644.366013
Wales 7491.226804
London 9857.194853
Scotland 10519.26891
Grand Total 8679.855785

Chart 1.2.1: Pivot chart of average total debt in 9 regions

1.2.2. Pivot chart

REGIONS - DEBT
12000 10519.268907563

9068.79187817259 9644.3660130719 9857.19485294118

10000
8421.29520295203 8882.04727272727
8000 7711.5 7491.22680412371
6742.14859437751
6000

4000

2000

0
North / North West Midlands South East East Anglia South West Wales London Scotland
Yorks and
Humberside

Chart 1.2.2 Pivot chart of average total debt in 9 regions

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I can infer that London and Scotland have the greatest average overall debt. The
relationship between income and regions, however, does not follow the same pattern
because Scotland's figure is larger than the others.

1.2.3. T – test
To check whether the total debt of Scotland is really higher than that of London,
I did the following t-test:

μ1: average income of London

μ2: average income of Scotland
 H0 : μ1 - μ2 ≤ 0
 Ha : μ1 - μ2 > 0
 α: 0.05

t-Test: Two-Sample Assuming Unequal Variances

London Scotland
Mean 9857.19 10519.27
Variance 98481422.36 116920775.72
Observations 236.00 265.00
Hypothesized Mean Difference 0.00
df 549.00
t Stat -1.37
P(T<=t) one-tail 0.06
t Critical one-tail 1.74
P(T<=t) two-tail 0.18
t Critical two-tail 1.94

Based on the table, we can conclude that p < 0.05

 Do NOT Reject H0 at the level of 95%

 Total debt of Scotland can be higher than the total dept of London

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 1.3. Conclusion from the overall analysis
According to the findings of the analysis in sections 1 and 2, London has the
highest income and debt levels among the UK's regions. It is clear that, when compared
to the other influences, London's income, spending, and borrowing needs have the most
impact on the UK.
I will therefore concentrate on investigating the numerous elements that affect income
and debt decisions in London beginning with this phase of the investigation.

2. Analysis of London’s data

2.1. Industries
2.1.1. Relation between Industries and Income in London
In order to easily analyze the data related to industries, I have grouped the
occupations by industries as follows:
2.1.1.1. Grouping occupations to Industries
Group 1: Primary activities
m Agriculture, forestry and fishing (1)
m Mining and quarrying (2)
m Energy and water (3)
Group 2: Secondary activities
m Manufacturing (4)
m Construction (5)
Group 3: Tertiary activities
m Transport and storage (6)
m Wholesale, retail, hotels and restaurants (7)
Group 4: Quaternary activities
m Professional, scientific and technical activities (11)
m Administrative and support service activities (12)
Group 5: Quinary activities
m Information, communication and IT (8)
m Banking, finance and insurance (9)
m Real estate activities (10)
m Public administration, defence, education and health (13)
m Arts, entertainment and recreation (14)

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 2.1.1.2. Pivot table

Row Labels Average of interviewee's income

Primary activities 22808.8
Secondary activities 30555.55556
Tertiary activities 33332.9
Quinary activities 29146.28507
Quaternary activities 31403.84
Others 21193.78292
Don't know 12575.39031
Grand Total 21781.6456

Table 2.1.2: Pivot table of average Income in 7 Industries group

2.1.1.3. Pivot chart

INCOME - INDUSTRIES LONDON

35000 33332.9
30555.5555555556 31403.84
30000 29146.2850678733

25000 22808.8
21193.7829232996
20000

15000 12575.3903133903
10000

5000

0
es es es es es rs w
iti iti iti iti iti he no
ctiv ctiv ctiv ctiv ctiv Ot t' k
a a a a a n
ar
y ry ry ar
y
ar
y Do
im nda rti
a
in rn
Pr co Te u e
Q at
Se Qu

Chart 2.1.3: Pivot chart of average Income in 7 Industries group

The graph suggests that those working in tertiary and quaternary industries can earn
more money than those in other industries.
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 2.1.2. Relation between Industries and total debt in London
2.1.2.1. Pivot table
Industries Average of boe97free_total
Primary activities 7572.277778
Secondary activities 10000
Tertiary activities 8350.083333
Quaternary activities 9046.811594
Quinary activities 8181.790909
Others 11014.0146
Don't know 6375.350427
Grand Total 8717.941392

Table 2.2.1: Pivot table of average debt in 7 Industries group

2.1.2.2. Pivot chart

DEBT - INDUSTRIES
12000
11014.0145985401
10000
10000 9046.8115942029

8350.08333333333 8181.79090909091
80007572.27777777778
6375.35042735043
6000

4000

2000

0
es es es es es rs w
iti iti iti iti iti he no
ctiv ctiv ctiv ctiv ctiv Ot t' k
a a a a a n
ar
y ry ry ar
y
ar
y Do
im nda rti
a
rn in
Pr co Te e u
at Q
Se Qu

Chart 2.2.1: Pivot table of average debt in 7 Industries group

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 2.1.3. Conclusion on industries
We can observe from the two tables above that those who engage in secondary and
quinary activities earn the most money. The highest level of debt is, however, incurred
by primary activities, quintenary activities, which are ranked second, and secondary
activities, which are ranked third. Yet, based on the chart, the income of those engaged
in primary activities is fairly low, making it uncertain whether they would be able to
pay off their debt. Thus, the bank products should concentrate on these 2 industrial
groupings, quintenary and secondary activities, when choosing the audience to target
for the new loan campaign.

As we all know, London leads the nation in both income and debt, and those with high
incomes frequently borrow money. Therefore, it is very easy to get these people to once
again take out a bank loan for many of their purposes as before. Let's call this
remarketing.

2.2. Age
2.2.1. Relation between age and income in London
2.2.1.1. Pivot table

Age group Average of interniewee's income

18 - 24 17746.54545
25 - 34 28507.39678
35 - 44 32694.39444
45 - 54 29533.47563
55 - 64 24670.15164
65+ 22963.54191
Grand Total 26331.2417

Table 2.3.1: Pivot table of average income of 6 age groups

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 2.2.1.2. Pivot Chart

AGE - INCOME IN LONDON

32694.39444444
35000 44 29533.47562582
28507.39677891 35
30000 65 24670.15163934
43 22963.54191363
25000 25
17746.54545454
20000 55

15000

10000

5000

0
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+

Chart 2.3.2: Pivot chart of average income of 6 age groups

It is evident from all the data inside that those between the ages of 35 and 44
have the highest income. We won't talk about the 18 to 24 age group right now because
most of them are students and often don't make a lot of money. The 65+ category is
similarly excluded because their primary source of income is typically a pension, which
is not a significant amount. They typically have a lot of assets, though, so they don't
need much more debt.

2.2.2. Relation between age and debt in London

2.2.2.1. Pivot table

Age group Average of debt

18 - 24 12128.63426
25 - 34 10099.64286
35 - 44 9941.636364
45 - 54 6662.77193
55 - 64 7304.821053
65+ 6674.960396
Grand Total 9370.478152

Table 2.4.1: Pivot table of average debt of 6 age groups in London

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 2.2.2.2. Pivot chart

AGE - TOTAL DEBT LONDON

14000
12128.6342592593
12000
10099.6428571429 9941.63636363636
10000

8000 7304.82105263158
6662.77192982456 6674.9603960396
6000

4000

2000

0
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+

Chart 2.4.2: Pivot table of average debt of 6 age groups in London

The age categories of 18 to 24 and 65 and older will not be included for the reasons
mentioned above. Groups 25 to 34, 35 to 44, and 45 to 54, however, have fairly high
credit demand (based on chart).

I conducted an ANOVA test to see if these age groups' borrowing requirements varied.

2.2.3. ANOVA test

 H0: μ1 = μ2 = μ3 = μ4 = μ5 = μ6
 Ha : not all the mean are equal
ANOVA: Single Factor

SUMMARY
GROUPS Count Sum Average Variance
18 - 24 33 328615 9958.03030 189974995.7
3
25 - 34 74 686603 9278.41891 136561376.8
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35 - 44 80 707058 8838.225 107589339.5
45 - 54 45 211089 4690.86666 37776612.44
7
55 - 64 23 217282 9447.04347 131571499.2
8
65+ 25 131660 5266.4 37999276.08

ANOVA
Source of
SS df MS F P-value F crit
Variation
Between
1025018727 5 205003745.5 1.871340504 0.09947 2.24695
Groups
Within
3001646474 274 109549141.4
Groups

Total 3104148347 279

Figure 2.2.4: ANOVA test the pattern of debt within age group

P-value > 0.05 => Do NOT reject H0 at the level of 95%

The total debt of the age groups (except 18 -24 and 65+) did not have too much
difference.
2.2.4. Conclusion on Age
As the 18 to 24 age group is primarily composed of students, they have not
produced much revenue and are unlikely to be able to pay their debts in the near future,
it is not required to examine it in the above income and debt section. The 65 and older
age group shouldn't be discussed because they already have too many assets. Also,
although their pension income may appear low, older people frequently have few
demands other than their health and have a lower risk tolerance, so they won't take on

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as much risk.Going back to the other groups, we see that in terms of income, the 35-44
age group leads, followed by 25-34 and 45-54.

But, when I used ANOVA to examine the data, I got to the conclusion that there
is no evidence to support the difference between the total debt figures, even though the
numbers appear to be very different when viewed in the chart. All ages (apart from
65+) are worthwhile targets.

The 25–34 age group has the biggest demand for debt, according to the statistics, when
it comes to home debt. The 55 to 64 age group comes next. The two age ranges of 35 to
44 and 55 to 64 both have perfect indicators for income, debt, and housing debt,
making them deserving of the bank's attention in a new loan campaign.

2.3. Relation between total debt, saving and income

2.3.1. Multiple regression
It is apparent that employment and age have an impact on debt levels when we look at
the two major groupings of industries and age. What then will be the next element that
also has a direct impact on debt and income?

Savings like that. It goes without saying that a person's degree of spending and saving
will have a significant impact on that decision.

For example, even if I make a very high salary, I don't save and instead spend it
recklessly, which leaves me broke at the end of the month and causes me to take out a
loan to pay for my living expenses. Or, even though I make a lot of money, I don't like
to save and like riskier ventures, so I constantly take on further debt to invest in them
and strategically use them to generate revenue.

Hence, I used multiple regression to thoroughly evaluate the degree to which the two
elements of income and savings affect the overall debt. The following page contains the
results and comments with:

Y: (dependent variable) total debt

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X (Independent variable) Income, saving

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