House Price Analysis

House Price Analysis Median sale price for houses The graph below will show the trend of median sale prices for the houses for from 1993 to 2012. The data is presented in quarters.Advertising We will write a custom essay sample on House Price Analysis specifically for you for only $16.05 $11/page Learn More From the graph above, it is evident that there is an upward trend of median sale prices in all the cities. The trend is upward from year to year in all the quarters. It is an indication of increasing prices of housing over the years. The growth can be attributed partly to increase in the inflation level and partly to increase in the level of economic activity in the regions. Inflation increased from 65.7 in the first quarter of review 104.5 in the last quarter (Rabinowitz 2004) Estimation of the mean The graph below shows the trend of the mean value of sale prices. The mean value of sale prices was increasing over time. It is shown by the upward trend of values over time. T his could be an indication of the structural increase in the long run and the equilibrium. This could also be as a result of an increase in interest rates. Increase in interest rates increases the cost housing thus increasing the sale price of houses. Simple linear time regression Regression analysis is a statistical tool that is used to develop and approximate linear relationships among various variables. Regression analysis formulates an association between several variables. When coming up with the model, it is necessary to separate between dependent and independent variables.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Regression models are used to predict trends of future variables. The section carries out a simple linear regression between the mean sale price of houses and time. The mean sale price will be the explained variable while the explanatory variable will be tim e (Arnott McMillen 2006) The regression line will take the form Y = b0 + b1X Y = Mean prices X = Time The theoretical expectations are b0 can take any value and b1 0. Regression Results The table below summarizes the results of the regression. Coefficients Standard Error t calculated Intercept -74738.9 1873.306 -39.8968 Time (X) 37.59659 0.93548 40.18962 R2 95.50% From the above table, the regression equation can be written as Y = -74738.9 + 37.59659 X. The intercept value is not dependent on the area of the house but on other factors such as the location of the house. The value captures all other factors that were not included when modelling the regression line. The coefficient value 37.59569 implies there is a positive relationship between mean sale price and time. The value of the coefficient of determination is high and it shows a strong positive relationship between the two variables.Advertising We will write a custom essay sample on House Price Analys is specifically for you for only $16.05 $11/page Learn More Real median prices Converting the nominal median sale prices to real median sale prices eliminates the effect of inflation. The real values are arrived at by using base year as a reference point and taking into account the consumer price index. Once the effect of inflation has been eliminated, one can now evaluate the real change in the median sale prices. From the calculations done, the real values are lower than the nominal values of median sale prices. However, the mean values still has the same trend as those for nominal median values as shown in the graph below. The graph above shows that there is an increase in the values for real sale prices over time. The results of the regression line are shown below. The regression line will take the form Y = b0 + b1X Y = Mean prices (real) X = TimeAdvertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The theoretical expectations are b0 can take any value and b1 0. Regression Results The table below summarizes the results of the regression. Coefficients Standard Error t calculated Intercept -59995.3 2805.289 -21.3865 Time (X) 30.27972 1.400888 21.61466 R2 86.00% From the above table, the regression equation can be written as Y = -59995.3 + 30.27972 X. The intercept value is not dependent on the area of the house but on other factors such as the location of the house. The value captures all other factors that were not included when modelling the regression line. The coefficient value 30.27972 implies there is a positive relationship between mean sale price and time. The value of the coefficient of determination declined from 95.50% to 86%. The value is still high and it shows a strong positive relationship between the two variables. The growth in real sale prices between September 1993 and September 2003 is 157.08% while the growth between December 2003 and Septem ber 2012 is (7.16%). It can be deduced that there was a rapid growth in real sale prices between 1993 and 2003 thereafter the prices increased at a declining rate and thereafter started to decline. (Evans 2008). This could be an indication that the government is putting up measures to ensure that there are no serious fluctuations in the sale prices of houses every year (Edwards 2007). Rent The growth in real rent between September 1993 and September 2003 is 88% while the growth between December 2003 and September 2012 is 120%. It can be deduced that there was a rapid growth in real rent between Dec 2003 and 2012. The growth rate for the first nine years was 88%. Thus, it can be deduced that there is a general increase in the rent level in Sydney and its regions. The ratio of house prices to income increased over the period. In 1993, the ratio was 0.00883 in 1993. The value increased to 0.010211 in 2012. This can be attributed to an increase in rent over the years. There was an incre ase in the rental yield over the years. The rental yield in 1993 was 74.78%. The value declined to bout 43% in 2003 thereafter it started to raise. The rental yield in 2012 was 81.43%. The graph below shows the relationship between rental yield and the ratio of house prices to income (O’Sullivan 2011; O’Sullivan Gibb 2008) The graph above shows that there is a negative relationship between rental yield and the ratio of house prices and rent. This can be seen in the downward trend that can be seen in the points in the diagram above. Prices and rent series tend to move in the same direction (McMillen McDonald 2011; Arnott McMillen 2006). Explaining the relative movement of prices There has been rapid growth in the property prices in the regions. The growth between 1993 and 2003 was more rapid than the growth rate between 2003 and 2012. This can be attributed to government interventions to stabilize the price of housing (Riley 2009). References Arnold, R 2011, Economi cs, Cengage Learning, USA. Arnott, R McMillen, D 2006, A companion to urban economics, Blackwell Publishing Ltd., USA. Edwards, M 2007, Regional and urban economics and economic development: Theory and methods, Auerbach Publications, New Delhi. Evans, A 2008, Economics and land use planning, John Wiley Sons USA. Mankiw, G 2011, Principles of economics, Cengage Learning, USA. McMillen, D McDonald, J 2011, Urban economics and real estate: Theory and policy, Hamilton Printing Company, USA. O’Sullivan, A Gibb, K 2008, Housing economics and public policy, John Wiley Sons USA. O’Sullivan, A 2011, Urban economics, McGraw-Hill Education, USA. Rabinowitz, A 2004, Urban economics and land use in America: The transformation of cities in the twentieth century, M.E. Sharpe, USA. Riley, G 2009, Housing market economics digital textbook, Tutor2u Limited, USA.

Finnish Culture of Michigans Upper Peninsula

Finnish Culture of Michigan's Upper Peninsula Tourists to the remote towns of the Upper Peninsula (UP) of Michigan may be puzzled by the many Finnish flags adorning local businesses and homes. Evidence of Finnish culture and ancestral pride is ubiquitous in Michigan, which is less surprising when taking into account that Michigan is home to more Finnish Americans than any other state, with the majority of these calling the remote Upper Peninsula home (Loukinen, 1996). In fact, this region has more than fifty times the proportion of Finnish Americans than the rest of the United States (Loukinen, 1996). The Great Finnish Emigration   Most of these Finnish settlers arrived on American soil during the â€Å"Great Finnish Immigration.† Between 1870 and 1929 an estimated 350,000 Finnish immigrants arrived in the United States, many of them settling in an area that would be come to known as the â€Å"Sauna Belt,† a region of especially high population density of Finnish Americans encompassing the northern counties of Wisconsin, the northwestern counties of Minnesota, and the central and northern counties of the Upper Peninsula of Michigan (Loukinen, 1996).   But why did so many Finns choose to settle half a world away? The answer lies in the many economic opportunities available in the â€Å"Sauna Belt† that were extremely scarce in Finland, a common dream to earn enough money to buy a farm, a need to escape from Russian oppression, and the Finn’s deep cultural connection to the land. Finding Home Half a World Away Like Finland, Michigan’s many lakes are the modern day remnants of glacial activity from thousands of years ago. In addition, due to Finland and Michigan’s similar latitude and climate, these two regions have very similar ecosystems. Both areas are home to seemingly ubiquitous pine-dominated mixed forests, aspens, maples, and picturesque birches. For those living off the land, both regions are located on beautiful peninsulas with a rich fish stock and woods full of delicious berries. The forests of both Michigan and Finland are home to a plethora of birds, bears, wolves, moose, elk, and reindeer. Like Finland, Michigan experiences bitterly cold winters and mild summers. As a result of their common high latitude, both experience very long days in the summer and significantly shortened daylight hours in the winter. It is easy to imagine that many of the Finnish immigrants arriving in Michigan after such a long sea voyage must have felt like they had found a piece of home half a world away. Economic Opportunities The primary reason Finnish immigrants chose to immigrate to the US was for the job opportunities available in the mines prevalent in the Great Lakes area. Many of these Finnish immigrants were young, uneducated, unskilled men who had grown up on small rural farms but did not own land themselves (Heikkil Uschanov, 2004). By Finnish rural tradition, the eldest son inherits the family farm. As the family plot of land is generally only large enough to support one family unit; splitting the land among siblings just was not an option. Instead, the oldest son inherited the farm and paid the younger siblings a cash compensation who were then forced to find work elsewhere (Heikkil Uschanov, 2004). The Finnish people have a very deep cultural connection to the land, so many of these younger sons who were unable to inherit land were looking for some way to earn enough money to buy land to operate their own farm. Now, in this point in history, Finland was experiencing rapid population growth. This rapid population growth was not accompanied by a rapid increase in industrialization, as seen in other European countries during this time, so a widespread job shortage occurred. At the same time, American employers were actually experiencing a labor shortage. In fact, recruiters were known to come to Finland to encourage frustrated Finns to immigrate to America for work. After some of the more adventurous Finns took the leap to emigrate and sailed to America, many wrote back home describing all of the opportunities they had found there (Loukinen, 1996). Some of these letters were actually published in local newspapers, encouraging many other Finns to follow them. â€Å"Amerika Fever† was spreading like wildfire. For the young, landless sons of Finland, immigration began to seem like the most viable option. Escaping Russification The Finns met these efforts to effectively eradicate their culture and political autonomy with widespread backlash, especially when Russia mandated a conscription law that forcibly drafted Finnish men to serve in the Russian Imperial Army. Many young Finnish men of conscription age saw serving in the Russian Imperial Army as unjust, unlawful, and immoral, and chose instead to emigrate to America illegally without passports or other travel papers. Like those who ventured to America seeking work, most if not all of these Finnish draft-dodgers had intentions to eventually return to Finland.   The Mines The Finns were wholly unprepared for the work that awaited them in the iron and copper mines. Many had come from rural farming families and were inexperienced laborers. Some immigrants report being ordered to begin work the same day that they arrived in Michigan from Finland. In the mines, most of the Finns worked as â€Å"trammers,† the equivalent of a human pack mule, responsible for filling and operating wagons with the broken ore. Miners were horrendously overworked and were subjected to extremely dangerous working conditions in an era where labor laws either didn’t properly exist or were largely unenforced. In addition to being completely ill-equipped for the manual component of mining work, they were equally unprepared for the transition from the completely culturally homogenous rural Finland to a high stress working environment working side by side with other immigrants from many different cultures speaking many different languages. The Finns responded to the massive influx of other cultures by shrinking back into their own community and interacting with other racial groups with great hesitation. Finns in the Upper Peninsula Today With such a high proportion of Finnish Americans in the Upper Peninsula of Michigan, it is no wonder that even today Finnish culture is so intricately intertwined with the UP. The word â€Å"Yooper† means several things to the people of Michigan. For one, a Yooper is a colloquial name for someone the Upper Peninsula (derived the acronym â€Å"UP†). Yooper is also a linguistic dialect found in the Upper Peninsula of Michigan that is heavily influenced by Finnish due to the masses of Finnish immigrants who settled in Copper Country. In the UP of Michigan it is also possible to order a â€Å"Yooper† from Little Caesars Pizza, which comes with pepperoni, sausage, and mushrooms. Another signature UP dish is the pasty, a meat turnover that kept the miners satisfied through a hard day’s work in the mine. Yet another modern reminder of the UP’s Finnish immigrant past lies in Finlandia University, a small private liberal arts college established in 1896 in the thick of Copper Country on the Keweenaw Peninsula of the UP. This University boasts a strong Finnish identity and is the only remaining university established by Finnish immigrants in North America. Whether it was for economic opportunities, an escape from political oppression, or a strong cultural connection to the land, Finnish immigrants arrived in the Upper Peninsula of Michigan in droves, with most, if not all, believing that they would soon return to Finland. Generations later many of their descendants remain in this peninsula that looks eerily like their motherland; Finnish culture is still a very strong influence in the UP.