full qt 2 assignment (1)

UBEQ1123 Quantitative Techniques II (Jan 2013/2014)

UNIVERSITY TUNKU ABDUL RAHMAN

FACULTY OF BUSINESS AND FINANCE

ACADEMIC YEAR 2013/2014

ASSIGNMENT

UBEQ 1123

Quantitative Techniques IIVariable: Gross Saving (% of GDP)

Countries: Malaysia, Singapore and New Zealand

Tutorial Group: T14 Tutor: Miss. Tan Yan Teng

Group Members:

No Name ID Course

1 LIM SIN PEI 13ABB08313 BA

2 ONG HOU YIN 13ABB00533 BA

3 SOO PEI TING 13ABB04938 BA

4 WONG WEI MIN 11ABB01194 BF

5 WONG YOKE MUN 12ABB02003 BF

1


Topic Page1 Background Description 3-52 Statistical Results 6-123 Conclusion 13-144 Bibliography 15

CONTENT

Total Page for assignment: 12 pages

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a) Illustrate the background of the countries as well as describe the development, performance, and trend of the variable in the 3 selected countries. Make use of graphical presentation, table, descriptive statistics (mean, standard deviation and so on), etc. to enhance your content.

0

10

20

30

40

50

60 Malaysia & SingaporeMalaysia

Singapore

Year

Gros

s Sav

ings

(% o

f GDP

)

From the graph above, we able to observed that the Singaporean has a higher saving than

Malaysian in past two decades. The economic condition of Singapore is not comparable

as Malaysia economic condition when Singapore is independent from Malaysia. In

particular, household saving includes savings of unincorporated business (Susan M.

Collins, 1991). This is the reason why Singapore has a higher household savings than

Malaysia, Singapore citizen are more likely encounter to do the business than Malaysia

citizen. In year 1990 to 1997, both Malaysia and Singapore household saving trend has an

increase. This is because the economics of whole world is in optimistic condition and

reaching the peak of the session. As we can notice from the graph, 1997 will be the peak

and it is start to recession during the year which caused by the Asian financial crisis. This

crisis has affected majority of the Asian country (Dick K.Nanto, 1998). The crisis has put

a negative impact and lasting along to year 2002 and the economy start to recover, that

why the graph sloping upwards from year 2002. The average, mean of Malaysia Gross

Saving in percentage from year 1990 to 2012 is 30.01645 while Singapore is 45.08831.

3


19901992

19941996

19982000

20022004

20062008

20102012

01020304050 Malaysia & NewZealand

Malaysia

NewZealand

Year

Gros

s Sav

ings

(% o

f GDP

)

The plotted diagram has significantly shows the savings of New Zealand is far behind the

Malaysia savings. The New Zealand household had a poor saving record in these recent

years. According to New Zealand’s Institutional Sector Accounts, it shows that New

Zealand household has generally spent more money than they earned over the 20 years,

especially since year 2001 when the property market was buoyant. That was why the

curve has downward sloping since year 2001 and never trend back to the higher degree of

the saving power. Comparison of the average Gross Saving in percentage of Malaysia to

New Zealand is 30.01645 to 16.34252.

0102030405060 Singapore & NewZealand

SingaporeNewZealand

Year

Gros

s Sav

ings

(% o

f GDP

)

In the above diagram, we can have a conclusion about the saving ability of New Zealand

household is not comparable to the household of Singapore. Even though during the

financial crisis of year 1997, the saving power of Singapore household was still preceding

than the New Zealand. Besides that, the graph shows the degree of saving power of New

4


Zealand household is smooth and steady within 10% to 20%. The fluctuation of the graph

does not have radical changes because the saving power of New Zealand household is not

strong and they usually spent the whole salary of the months (New Zealand Institution,

2012).

5


b) i) Based on the 3 countries, please run an ANOVA analysis to verify the statistical difference in mean of the variable among the 3 chosen countries.

SUMMARYGroups Count Sum Average Variance

Row 1 23 805.3783 35.0164478 8.179743Row 2 20 326.8495 16.342475 2.855197Row 3 23 1037.031 45.088313 17.54993

ANOVASource of Variation SS df MS F P-value F crit

Between Groups 9002.753 2 4501.37637 457.17563.11E-

38 3.142809Within Groups 620.3015 63 9.84605524

Total 9623.054 65

µ1= gross saving (% of GDP) of Malaysia.

µ2= gross saving (% of GDP) of Singapore.

µ3= gross saving (% of GDP) of New Zealand.

H0: µ1=µ2=µ3

H1: at least one of the µi is different. (i=1, 2, 3)

α=0.05

Decision rule: Reject H0, is the test static is more than critical value, otherwise do not reject.

Critical value: Fα, k-1, n-k= F0.05, 2, 63

=3.15

F-test: MSAMSW =

4501.376379.84605524 =457.1756

Decision making: Reject H0, since test statistic (457.1756) is more than critical value (3.15).

Conclusion: We have sufficient evidence to conclude that there is at least one of the µi is different.

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ii) Specifically, run two independent samples mean t-test with unequal variances to verify the comparison in the performance of that variable between 2 countries. There should be three separated t-test since 3 countries are selected to form three pair-wise comparisons.

1) Malaysia V Singapore:

Let µ1 = gross saving (% of GDP) of Malaysia

µ2= gross saving (% of GDP) of Singapore

H0:µ1≥µ2

H1:µ1<µ2

Significant level: α = 0.05

Decision rule: Reject H0, if test statistic value is lower than lower bound critical value,

otherwise do not reject.

Critical value = tα, [S2 1n1

+ S22n 2

]2

÷ [ S21

n 1]2

n 1−1+[ S22

n2]2

n 2−1

= t 0.05, [8.1797

23+ 17.5499

23]

2

÷ [ 8.1797

23]

2

23−1+[ 17.5499

23]2

23−1

=t 0.05, [1.25144÷ (0.005749+0.02646)]

=t 0.05, 38.85

=t 0.05, 39

= -1.684

Test Statistic: T-test = ( x1−x2 )−¿¿

=(35.0614−45.0883 )−(0)

√ 8.179723

+17.549923

7


= −10.0269

1.0577

= -9.4799

Decision Making: Reject H0, since the test statistic (-9.4799) is lower than critical value

(-1.684).

Conclusion: Sufficient evidence to conclude that gross saving (%GDP) of Malaysia is

less than gross saving (%GDP) of Singapore.

8


2) Malaysia V New Zealand:

Let µ1 = gross saving (% of GDP) of Malaysia

µ3= gross saving (% of GDP) of New Zealand

H0:µ1≤µ3

H1:µ1˃µ3


Decision Rule: Reject H0, if test statistic value is more than upper bound critical value,



+ S22n 2

]2

÷ [ S21

n 1]2

n 1−1+[ S22

n2]2

n 2−1

= t0.05, [8.1797

23+ 2.8552

20]2

÷ [ 8.1797

23]

2

23−1+[ 2.8552

20]2

20−1

= t0.05, [0.3556 + 0.1428]2÷ (0.005749 + 0.0010727)]

= t0.05, (0.2484÷ 0.0068217)

= t 0.05, 36.4132

= t0.05, 36

= 1.684 (right tailed test)

Test Statistic: t-test = ( x1−x2 )−¿¿

9


=(35.0164−16.3425 )−(0)

√ (8.1797)23 +

(2.8552)20

= 18.67390.7060

= 26.4503

Decision Making: Reject H0, since the test statistic (26.4503) is greater than critical

value (1.684).

Conclusion: Sufficient evidence to conclude that gross saving (%GDP) of Malaysia is

greater than gross saving (%GDP) of New Zealand.

10


3) Singapore V New Zealand

Let µ2 = gross savings (% of GDP) of Singapore

µ3= gross savings (% of GDP) of New Zealand

H0:µ2≤µ3

H1:µ2˃µ3


Decision Rule: Reject H0, if test statistic value is more than upper bound critical value,



+ S22n 2

]2

÷ [ S21

n 1]2

n1−1+[ S22

n 2]2

n 2−1

= t0.05, [17.5499

23+2.8552

20]2

÷ [ 17.5499

23]2

23−1+

[ 2.855220

]2

20−1

= t 0.05, [0.8205÷ (0.02646+0.001073)]

= t 0.05, 29.8006

= t 0.05, 30

= 1.697

11


Test Statistic: t-test = ( x1−x2 )−¿¿

=(45.0883−16.3425 )−(0)

√ 17.549923

+ 2.855220

= 28.74580.9517

=30.2047

Decision Making: Reject H0, since the test statistic (30.2047) is greater than critical

value (1.697).

Conclusion: Sufficient evidence to conclude that gross savings (% of GDP) of Singapore

is greater than gross savings (% of GDP) of New Zealand.

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Conclusion

The statistics shown GDP of Singapore is higher than both GDP of Malaysia and

New Zealand, whereas GDP of Malaysia is higher than GDP of New Zealand (Knoema,

2011). The Economist Intelligence Unit found that, growth in industry was significant

contribute to Singapore’s one-third of GDP growth rate by boost the domestic demand

through multiplier effect. The industrial sector which including the construction sector

had gains notable benefits especially from manufacturing sector. Meanwhile, Singapore

has remained an important oil-refining centre. Furthermore, excellent exporting goods

services in external sector enable Singapore to dominate the economy sector. Their

exporting service was supported by the fast growth in fund-management and tourism.

Gross fixed investment will be strengthened by substantial government-funded projects,

whereas private consumption also keep contribute in GDP growth (Singapore economy:

Quick View - GDP growth remains strong: [1], 2010). These become the competitive

advantage for Singapore to have a higher GDP rate rather than the others countries such

as Malaysia and New Zealand.

13


With the advanced economies and improvement of export demand in recent years,

the acceleration of economic activities in Malaysia was mitigation the overall moderation

domestic demand. The ongoing export growth and demand from China and European

area lead Malaysia’s export services growth rapidly and help in boost the GDP of

Malaysia. Even though the GDP of Malaysia is lower than Singapore but it’s higher than

GDP rate of New Zealand. In addition, Petronas Dagangan Berhad, a provider of

petroleum products in Malaysia plans to catch up with Shell which is the market leader in

retail and lubricants segments nowadays. The competitiveness in the industry enables to

growth the GDP rate in Malaysia. Moreover, the high usage level of mobile internet

services allows Digi Company’s increase more revenue rather than their expectations

revenue level and have a stable margins. The systematically growth in industry enable

Malaysia’s GDP maintain in moderate rate which lower than Singapore but higher than

New Zealand (Stocks In Focus MY (Malaysia GDP, Petronas Dagangan, DiGi.Com),

2014).

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Bibliography

1)

(2011). Retrieved March 15, 2014, from Knoema: http://knoema.com/nwnfkne/gdp-ranking-2013-data-and-charts

2)(2010). Singapore economy: Quick View - GDP growth remains strong: [1]. New York : The Economist Intelligence Unit.

3)Stocks In Focus MY (Malaysia GDP, Petronas Dagangan, DiGi.Com). (2014, February 10). Shares Investment : Facts & Figures . Malaysia； United States: Pioneers & Leaders (Publishers) Pte. Ltd.

4)

Statistic New Zealand. (2012, April). Retrieved from The fall and rise of household saving: http://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts/household-saving-fall-and-rise.aspx

5)Collins, S. M. (1991). National Saving and Economic Performance. Saving Behavior in Ten , 349-376.

6)Nanto, D. K. (1998, February 6). FAS. Retrieved from THE 1997-98 ASIAN FINANCIAL CRISIS: http://www.fas.org/man/crs/crs-asia2.htm

7)Zhou, P. (n.d.). Economic Geography. Retrieved from Singapore's Economic Development: http://geography.about.com/od/economic-geography/a/Singapore-Economic-Development.htm

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