ECON 940: An Australian Real Estate Investment Trust that Owns and Operates: Statistics for Decision Making Assignment, UOW, Australia

An Australian real estate investment trust that owns and operates income-producing residential real estate in the Sydney area is now keen to expand its presence in Sydney CBD and also create a further diversified property portfolio. The company has collected data for 190 potential investment properties on the Sydney market (the data is on an excel file named “REAL ESTATE”).

Assume you work for this company as an Analyst and have been asked to do a preliminary study of the real estate market. You can now use this data to study the main characteristics of these potential investment properties so the company will be in a better position to decide about investing in new property types and achieving its strategic objectives. You were given specific instructions to carry out descriptive and prescriptive analytics based on the type of property.

The data file lists the following information:

First Column: PRICE (Price of the property in Australian dollars).
Second Column: TYPE (Type of the property: 1 for House, 2 for Unit).
Third Column: PROXIMITY (Proximity to the CBD: 1 for “up to 5KM”, and 2 for “Between 5KM and 10KM”).
Fourth Column: BEDROOM (number of bedrooms: 1 for one-bedroom, 2 for two bedrooms, 3 for three bedrooms and above).
Fifth Column: BATHROOM (number of bathrooms: 1 for one bathroom, 2 for two bathrooms, 3 for three bathrooms and above).

PART 1

Calculate the Mean, Median, Standard Deviation, Coefficient of Variation, and 95% population means confidence intervals for property prices of Houses based on the following grouping:

• The proximity of the property to CBD
  Note: Calculate the above statistics for both “Up to 5KM” and “Between 5KM and 10KM”
• Number of bedrooms
  Note: Calculate the above statistics for “One bedroom”, “Two bedrooms” and “Three bedrooms or more”
• Number of bathrooms
  Note: Calculate the above statistics for “One bathroom”, “Two bathrooms”, “Three bathrooms or more”)

Note: In total, you need to show your results for 8 different categories. Provide all results in one table (see a sample table at the end of this document). What conclusions can you draw from these analyses? Write a conclusion for this part. Also, comment on the shape of distributions.

PART 2

Calculate the Mean, Median, Standard Deviation, Coefficient of Variation, and 95% population means confidence intervals for property prices of Units based on the following grouping:

• The proximity of the property to CBD
  Note: Calculate the above statistics for both “Up to 5KM” and “Between 5KM and 10KM”
• Number of bedrooms
  Note: Calculate the above statistics for “One bedroom”, “Two bedrooms” and “Three bedrooms or more”
• Number of bathrooms
  Note: Calculate the above statistics for “One bathroom”, “Two bathrooms”, “Three bathrooms or more”)

Note: In total, you need to show your results for 8 different categories. Provide all results in one table. What conclusions can you draw from these analyses? Write a conclusion for this part. Also, comment on the shape of distributions.

PART 3

Answer the following hypothesis testing questions:

1. Determine if average prices of units “within 5KM of the CBD” exceed average prices of units “located within 5 to 10KM from the CBD”.

2. Determine if average prices for House within 5 to 10KM of the CBD exceed the average price of the Unit within 5KM of the CBD.

3. Determine if average prices for “Houses with three-bedrooms within 5 to 10KM of the CBD” exceeds the average price of “Units within 5KM of the CBD”.

4. Test the difference between population means of houses of the following groups: prices for “One bedroom”, “Two bedrooms” and “Three bedrooms (or more)” properties.

5. Test the difference between population means of units of the following groups: prices for “One bathroom”, “Two bathrooms”, “Three bathrooms (or more)” properties.

Write a conclusion for each part.

In addition, write an overall conclusion which combines all of the above parts (Parts 1-3). Be clear in the conclusion that you draw from your analysis, and provide useful suggestions to the company’s CEO. Conclusions must be based on the findings of your analysis only.

PRESENTATION OF ASSIGNMENT

1. The answer to your assignment should be in the form of a Business Report.

2. Marks awarded will be based on presentations, analyses, and interpretations.

3. The report will provide you with an opportunity to demonstrate proficiency in Excel. Note that you need to provide your statistical outputs and can easily do this by importing Excel outputs to the Word document.

4. The following order is required for components of your Business Report:
a) An Executive Summary (Max 150 words). In this section, you summarize the main conclusions of the report in business language. It should also describe the primary purpose of the study, the general methodology used, the significant findings of each section, as well as key general conclusions and recommendations.
b) A Table of Contents with page numbers
c) Business Problem as given in the question in business language. Do not copy the question directly to the report.
d) Statistical Problem (i.e. methods you have used to do your analysis).
e) Analysis: This section should present the formula and discuss the results from all the analyses conducted. Outline the required steps and show the necessary computer output. Clearly label tables and graphs.
f) General Conclusion: This section should briefly review the study, summarize the inference(s) stemming from it, and highlight the evidence supporting each inference. Where appropriate, indicate the limitations of the results. The conclusions should be written in business language and in terms of the variables under discussion.
g) Recommendations: bearing in mind why the study was undertaken, briefly describe the implications and consequences of the conclusions drawn. You should include your recommendations for action (i.e. based on what you have found in your study).

5. Write clearly and precisely. A precise report is a clear report, one that is composed of unambiguous statements. The word limit is 3000 words.