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ECON325 Research project/Assignment The research project is an integrated assignment that draws together knowledge of Economic theory and the econometric skills gained throughout this module

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ECON325 Research project/Assignment The research project is an integrated assignment that draws together knowledge of Economic theory and the econometric skills gained throughout this module. The aim is to answer a research question or address a research problem, by writing a report. The research question is: “What are the determinants of consumption spending in South Africa?” Hint: https://www.economicsdiscussion.net/consumption-function/factors-determining-consumption-spending-consumption-function/25986

The research and the report, should:

•             Describe the question or the problem to address.

•             Explain why the question and answer to it, is significant.

•             Discuss the economic theory that guides the answers to the question.

•             Discuss earlier empirical examination of the question or problem by other researchers.

•             Describe the regression model and estimated equation.

•             Present the results, interpret and discuss them.

•             End with conclusions and recommendations.

Remember:

•             To adhere to all the technical requirements, including referencing style.

•             To consider the marks allocation – see the rubric below.

 

This project contributes 35% to your final module mark. The submission date is Friday 21 October 2021 at 12:00.

ECON325 Research project marking scheme

Criteria Mark     Total

Description of problem/ introduction                     2

Literature review theories of consumption and its determinants; recent findings                              6

Model specification                        5

Description of data                          3

EViews results                   3

Report/ interpret the estimated equation                            3

Evaluation: A priori signs                               3

Evaluation: First order tests [t (probability), R2, F] and second order tests [heteroscedasticity and serial correlation]                                8

Conclusion                          4

In text referencing done                              1

In text referencing done correctly                            2

List of references correctly done                              3

Technical preparation & General impression                       2

                                45

You can score bonus marks with creative specifications, for example, quadratic relationships, interactive dummies, etc...

 

General instructions

•             This is an individual assignment/project.

•             The data required for this assignment are uploaded to the assignment site for this assignment.

•             As part of the final submission, you also have to submit a one-page declaration indicating your names and the signature to declare that you actually did this assignment. You therefore cannot copy another person’s work and if you did you will be liable for a plagiarism penalty.

•             Also consult the file “Research Project details” for more explanation.

Technical requirements:

•             Final document can be a maximum of 2500 words

•             A4 page.

•             Font Arial, 12pt, 1.5 spacing.

•             Include the EViews output in your document as a picture.

•             Being academic writing, please use academic sources and reference them properly.

The data uploaded for this assignment were downloaded from the world development indicator (WDI) database of the World Bank from 1996 – 2021. The essence of this research is to identify the determinants of consumption spending in South Africa. The data series are purely time series and where there are few missing data, the data were filled with either interpolation or extrapolation. In case you may want to access the data, here is the link to the source https://databank.worldbank.org/source/world-development-indicators.

Below are the names and descriptions of the variables that are included in the dataset provided to you:

Dependent variable:

CONSUMPTION: Final consumption spending in trillion rands

Possible explanatory variables:

 INCOME              Gross income in trillion rands

 INFLATION         Consumer price index in per cent

 INTEREST            Deposit rate in per cent

 POPULATION    Total population in million

 TAX       Tax to revenue in per cent