ECON2209, Business Forecasting, 2015 S1 Course Project (14% + 3% in Total)

1. This project has a value of 14% of the total assessment. In addition, there is a teamwork

component worth 3%. The teamwork mark will be based on the online self and peer assessment (see Teamwork Assessment section at the end of this document).

2. This project must be completed in a group of 3 or 4 students. The members of a group come from the same tutorial class. Groups have been alphabetically assigned. Each group is identified by a class number (e.g. Class 2100) and a group number (e.g. Group 2). Please check the spreadsheets in ProjectGroups to see the group you belong to. Each group must select one person to submit the project. Each group should start their project cooperation as soon as practical.

3. Each group must submit one hard copy of the project and one online (soft) copy.

4. The online submission deadline is 11:59pm, Wednesday, 3/ June/2015. Each group MUST submit the online copy to Turnitin on the course website. A link to the project submission will be available in Week 12. Only one member of the group should make the submission that person must be nominated on the Group Cover Sheet.

5. Each group MUST also submit a hard copy to your tutor at the beginning of your Week 13 tutorial.

6. For both online and hard-copy submission, the project Cover Sheet must be properly filled, which includes the class number, group number, names and student numbers of the group members.

7. A late-submission penalty of 20% will apply for each 24 hours late. This applies to both the hard copy and the soft copy submissions.

8. For hard-copy submission, DO NOT use plastic sheets or binders. Simply staple the pages together. Do not submit loose-leaf sheets of paper.

9. Each student MUST complete a confidential online self and peer assessment by11.59 pm, Wednesday, 10/June/2013. Details about this teamwork assessment will be announced shortly. No marks will be awarded for this teamwork component, which is worth 3%, if the self and peer assessment is not completed by the deadline.

10. All submissions will be checked for plagiarism. The University regards plagiarism as a form of academic misconduct, and has very strict rules regarding plagiarism. Where it can be established that individual students are responsible for the plagiarism, those individual students will be penalised. However, where it is judged that the plagiarism should have been clear to the other group members, the penalty will apply to all members of the group.

THE UNIVERSITY OF NEW SOUTH WALES School of Economics

ECON2209, Business Forecasting, 2015 S1 Course Project

Group Cover Sheet

Check-list 1. Choose one member to submit the project: one soft-copy to be submitted online

and one hard-copy to be submitted to your tutor. 2. Class number, group number, all names and student numbers of the group must be

filled in on this Cover Sheet. 3. Each group member must complete the online self and peer assessment. Marks on

teamwork will be zero if this assessment is not completed by the deadline. Details about the teamwork assessment will be announced shortly (see Teamwork Assessment section at the end of this document).

Class: ________ Group: __ Full Name Student No. 1. (person for submission)

2.

3.

4.

ECON2209 Course Project Description Suppose that you work for RealAnswers (a consulting firm specialised in real estate market). Standing at the end of December 2009, you are assigned the task of analysing the monthly series on the building approvals of New South Wales (in the data file buildingApprovals2009Dec.xls). Your client, an international investment fund, is considering the strategies of its future investment in New South Wales real estate market. In particular, your client is interested in the answers to the following questions.

a) What are the main features of the historical building approvals (July/1983 to December/2009)?

b) If the main historical features remain unchanged, what will the future approvals (January/2010 to December/2011) look like?

Your task is to analyse the data and provide answers to the above questions. While your client does not use any technical jargons, you realise that the answer to Part (a) requires the construction of a proper econometric model for the historical building approvals, which will in turn produce the answer to Part (b). Your report should have four sections. The Executive Summary section should contain a summary of your answers and conclusions to the clients questions. In the Main Report section, you should report how you analyse the data, build and check the model, and produce the answers and conclusions. This section justifies the contents of Executive Summary. In the Further Issues section, you should comment on the likely shortcomings of your results. The Appendix section should hold the set of EViews commands used in your analysis. Further you do want to impress your client by delivering a nicely presented report.

Hints Total length of your completed project, including all discussions, tables, graphs,

EViews commands, and the cover page, should not exceed 12 pages. The marks are distributed as: 1 mark for Executive Summary, 11 marks for Main

Report, 1 mark for Further Issues, and 1 mark for Appendix and overall presentation.

Use the principles/models/techniques up to the end of BF-09 and the end of Chapter 10 of the textbook (inclusive).

The project description is deliberately brief, providing some room for you to demonstrate your grasp of the learned material. At minimum, a thorough analysis in the framework of the classical decomposition is expected.

The data file, buildingApprovals2009Dec.xls, has two columns: Date and Approvals. Note that Approvals are measured as the number of building approvals in New South Wales, and can be treated as real numbers (i.e. they are not restricted to integers).

A template EViews file, assign_temp.prg, is provided, which contains commands for reading data in EViews, generating time index and seasonal dummies. To carry out the computation of the project, it may be helpful to consult and borrow from the examples in the lectures (BF-09 in particular).

Use time polynomials up to the third order (at most) to model trend if any. Use monthly dummy variables to model seasonality if any.

Pay attention to the ACF and PACF of the cyclical component. Note that pure AR models, if suitable, are easier to estimate and analyse than MA or ARMA models. In particular, the stability analysis for AR models can be done in EViews.

Use SIC (or AIC) to select your preferred model. Testing for seasonality can be done in EViews by the commands

equation eqn1.ls y c D2 D3 D4 D5 D6 D7 D8 D9 D10 D11 D12 freeze eqn1.wald c(2)=c(3)=c(4)=c(5)=c(6)=c(7)=c(8)=c(9)=c(10)=c(11)=c(12)=0 where time trend (if any) or AR terms may also be included at the end of the equation.

You may directly model Approvals (without logarithm).

Teamwork Assessment (3 marks) The Course Project provides an environment for students to cooperate with one another to bring out the best of a group. Students in a group are expected to make effective and positive contributions to the project. More specifically, students are expected to (and certainly expect their team members to) a) contribute positively to task planning and coordination; b) help to raise the team morale; c) attend meetings punctually and be well prepared; d) communicate/discuss with team members constructively; e) share ideas generously and be able to build on others ideas; f) resolve disagreements with team members respectfully; g) complete allocated tasks with quality and in time; h) provide support and help to team members; i) demonstrate good knowledge and skills for the project. At the completion of this project, each student is required to give the following confidential assessment for each teammate (including herself/himself) online: Please rate this persons overall contribution to the project. (0 = nil; 1 = very low; 2 = low; 3 = satisfactory; 4 = high; 5 = very high) Your assessment should be based on the criteria in the list a)-i) above. Each student, who completed this assessment, will receive a Teamwork mark that is a summary of the self and peer assessment. The details for this online assessment will be announced shortly.

ECON2209, Business Forecasting, 2015 S1Group Cover SheetCheck-listECON2209 Course Project DescriptionHints

Teamwork Assessment (3 marks)