EC314
Seminar Group 08
Da Silva
Celine
cd521
18889512
Declaration: By the act of submitting this work, I confirm the work is entirely my own and I have fully referenced my sources as appropriate. I am aware of the penalties of plagiarism.
Assessment I
1
a)
bi) As shown by the graph, for 2008, there were relatively large fluctuations in the unemployment rates between countries. Netherlands had the lowest rate of 5.3% compared to Spain’s 24.5% making them the country with the highest rate.
In 2015, there were significant fluctuations in the rates between countries with countries such as Greece, Italy, Portugal and Spain experiencing rates of more than 30%. Germany had the smallest rate of 7.3% whereas Greece had a rate of 49.8%
bii) From the chart, it can be seen that between 2008 and 2015 the youth unemployment rate generally increased with the exception of Germany, Luxembourg, Hungary and the United Kingdom where the rate actually slightly declined between the years. Secondly the countries with the most substantial hike between years were Greece with a more than double increase followed by Spain then Italy and then Portugal with increases of at least approximately 17%. On the other hand, the country with the lowest increase was Sweden with approximately a 0.1% increase with an increase so minute it could be negated. These increases between the years could be due to the effects of the financial crisis of 2008. “The youth unemployment ratio did however rise from 2008 through to 2013 due to the effects of the financial and economic crisis on the labour market. The financial and economic crisis, however, severely hit the younger members of the labour force.” (Ec.europa.eu, 2018).
Descriptive Statistics for 2015
Mean 20.7652174
Standard Error 2.47765545
Median 17.325
Standard Deviation 11.8824181
Sample Variance 141.19186
Kurtosis 1.21713747
Skewness 1.3301128
Range 42.55
Minimum 7.25
Maximum 49.8
Sum 477.6
Count 23
Descriptive Statistics for 2008
Mean 14.73804348
Standard Error 1.125771441
Median 16.175
Standard Deviation 5.399010166
Sample Variance 29.14931077
Kurtosis -1.150879085
Skewness -0.094271911
Range 19.175
Minimum 5.3
Maximum 24.475
Sum 338.975
Count 23
c)
The tables above present the summary of the features of the data for 2008 and 2015. On comparing, note that there are quite a few notable differences that exist. Firstly, the mean between the years vary by 6 points and the standard deviation for 2015 is more than double the standard deviation for 2008. This means that the values for 2015 are more widely spread about the mean than in 2008. This is reinforced by the difference in range of both data sets. For 2015 the range is 42.55 whereas for 2008 the range is 19.175 which could imply that the data for 2015 contains outliers. In addition, the data for 2008 is negatively skewed whereas the data for 2015 is positively skewed. This suggests that for 2008 the youth unemployment rate for more than half of the countries is greater than the average youth unemployment rate. Conversely for 2015, more than half of the countries unemployment rate is less than the average. Finally, the kurtosis for 2008 was negative which suggest that it is a platykurtic that is it has light tails. This supports the notion that the data set for 2008 does not contain outliers. Contrarily, the kurtosis for 2015 is positive meaning that it is leptokurtic that is it has heavy tails. This also bolters the implication that it contains outliers.
di)
Bin Frequency
7 0
11 5
15 4
19 3
23 5
27 2
31 0
35 1
39 0
43 1
47 0
51 2
More 0
As illustrated by the diagram above, the shape of the distribution is positively skewed, and the tails are heavier i.e. they contain outliers.
dii) On comparing the findings above and the descriptive statistics, it is evident that the findings hold and thus confirms the reported data as we can visually observe the skew and the thickness of the tail.
e) A bar graph and histogram are both graphical tools used to display data. However, there are some significant differences between the two. Firstly, a bar graph compares different discrete, categorical data whereas a histogram shows frequencies of quantitative data. A bar chart is usually drawn with spaces between each bar (can be drawn without) since each bar represents a separate entity. In contrast, a histogram has no spaces between the bars since the data is categorized together to form ranges. In a bar chart the bars can be rearranged to any order the designer desires however, the same cannot be done for a histogram as it follows the order of the classes.
These graphical tools both have numerous merits for visualizing data. A bar chart is easy to understand as the categories and respective quantities are labelled on the axis thus allowing for relatively precise and accurate estimates to be taken expediently. It is also useful in identifying trends in the data over time and permits ease of comparisons between categories.
Similarly, a histogram is a powerful tool when it comes to visualizing data. It allows the graphing of large data sets and furthermore shows the prevalent data values that occurs in the set. It emphasizes the distribution of data as the shape can be used to identity the type of skewness and level of kurtosis.
2
Year CPI CPI Rebased
2002 75.4 100
2003 75.5 100.133
2004 76.5 101.459
2005 78.1 103.581
2006 79.9 105.968
ai) To facilitate better comparisons between banks the consumer price was rebased using 2002 as the base year
Deflated Profits
Year Barclays HSBC Lloyds RBS Nationwide
2002 3205 2773 2618 4669 326
2003 3839.907 2806.278 4342.241 6065.955 352.532
2004 4514.144 2910.539 3427.004 6427.234 420.860
2005 5097.465 3602.015 3687.939 7040.873 451.821
2006 6734.098 3752.070 4008.751 7883.499 508.643
Deflating data is an important step in economic analysis as it allows economists to adjust for price fluctuations. Price fluctuations result in distortions in reported data. In this case, increased profits may be as a result of two things, increased price level of services sold by the banks or increased quantity of services sold. However only an increase in the quantity sold would imply improvements in economic activity. Therefore, there exists the need to deflate the profits reported by the banks to adjust for changes in price level. This would then give the real profit earned by the bank during the time period.
aii)
The graph above illustrates the deflated profits earned by the banks for the period of 2002 to 2006. All the banks enjoyed increased levels profits from year to year that is they earned more than the previous year during the five-year period with the exception of Lloyds who experienced a drop in the level of profits between 2003 and 2004. Overall, RBS received the highest amount of profits throughout the period while Nationwide received the lowest.
bi)
Simple Chain Based Index
Year Barclays HSBC Lloyds RBS Nationwide
2002 100 100 100 100 100
2003 119.810 101.200 165.861 129.920 108.139
2004 117.559 103.715 78.922 105.956 119.382
2005 112.922 123.758 107.614 109.547 107.357
2006 132.107 104.166 108.699 111.968 112.576
Firstly, Barclays earned the highest increase in percentage of profits between 2005 and 2006 and the lowest increase in 2005. Then HSBC, over the years received an incremental increase with the exception of 2005 where there was a vast increase by approximately 124% followed by a drastic decline. Lloyds between 2002 and 2003 had a substantial increase in the percentage of profits earned however that substantial increase fell significantly in 2004 but slowly began to rise again. RBS had a dramatic rise in the percentage of profits compared to the previous year followed by a fall the next year, but it improved thereafter. Finally, Nationwide exhibited gradual increases during the first three years until the profit index decreased slightly however it rose again.
For the first year all the banks had an increase in the profit index. Then between 2003 and 2004 Lloyds and RBS had similar dramatic declines while Barclays had a small decline and Nationwide and HSBC continued to rise. Between 2004 and 2005, Lloyds, HSBC and RBS rose while Nationwide and Barclays fell. During the last year all the banks profit indices went up except for HSBC. In summary, Lloyds and RBS had the most similar progression.
bii) The Laspeyres index and Paasche index are measures used to monitor changes in price levels however they differ in their approach. The Laspeyres index uses the number of items bought in the chosen base year to calculate weights whereas Paasche uses the number of items bought in the current year to calculate weights. The Laspeyres index shows how much more or less it would cost to purchase the same quantity of goods relative to the base year however the Paasche index shows the value of the current year quantity of goods and how much it would’ve cost in the chosen base year.
The Laspeyres index has certain merits which include that quantity data from base year is all that is needed to attain weights therefore it would also be cheaper than Paasche since it doesn’t require news weights. Furthermore, it would be easier to do year to year comparisons since a single base year is used. The Paasche index illustrates the current consumption that is buying habits because it uses current quantities in its calculation.
References
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Ec.europa.eu. (2018). Glossary:Paasche price index – Statistics Explained. [online] Available at: https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Paasche_price_index [Accessed 26 Oct. 2018].
Ec.europa.eu. (2018). Unemployment statistics and beyond – Statistics Explained. [online] Available at: https://ec.europa.eu/eurostat/statistics-explained/index.php/Unemployment_statistics_and_beyond#Youth_unemployment [Accessed 26 Oct. 2018].
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Ons.gov.uk. (2018). CPI INDEX 00: ALL ITEMS 2015=100 – Office for National Statistics. [online] Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7bt/mm23 [Accessed 25 Oct. 2018].
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