MKTG216 – Consumer Demographics

Assignment 2

The whole Assignment (Questions 1, 2, 3 and 4) is to be submitted in hardcopy to BESS (6 Eastern Road ground floor) by 3pm on Wednesday 8th May 2019. Question 4 is also to be submitted to Turnitin on iLearn by 3pm on Wednesday 8th May 2019. An individual assessment coversheet is required for the hardcopy submission, which can be downloaded from the unit iLearn page or FBE website. Answers for Question 1-3 may be handwritten (as long as they are neat and legible) or typed. Using Excel (or other similar tools) is strongly recommended for Questions 1, 2 and 3. You must show necessary working steps. Answers to Question 4 must be typed.

Total marks for Assignment 2: 50 marks. Assignment 2’s weighting of final grade: 10%

Question 1 [11 marks]

Presented below are the results of quadratic regression analysis (y= a + bx – cx2) of average weekly household expenditure (y) according to the age of the household head (x) in Town Z in 2013-2014. Using the information provided:

A. Estimate weekly household expenditure (y) if the age of the household head (x) is 20, 30, 40, 50, 60 and 70 years (Note: Using Excel is recommended for this question). Please leave answers to 2 decimal places [6 marks]

B. Using the results of the estimation in part 1), draw a chart illustrating weekly household expenditure according to the ages of household head (Note: Using Excel is recommended for this question). [2 marks]

C. Discuss the shape of weekly household expenditure curve and the patterns of weekly household expenditure according to the ages of household head in Town Z in 2013-2014. [3 marks]

a

Intercept b

Coefficient of (x) c

Coefficient of (x2 )

Average weekly household expenditure (y)

-109.40

71.34

0.81

Question 2 [14 marks]

Given below is quintile distribution of average weekly household expenditure in Town A and Town B.

Quintile

Number of

Households Average weekly

Household expenditure ($) in

Town A Average weekly

Household expenditure ($) in Town B

Q1 200 500 900

Q2 200 800 1000

Q3 200 1,150 1,200

Q4 200 1,400 1,300

Q5 200 1,700 1,500

Using the information provided above:

A. Calculate the Gini Coefficient of average weekly household expenditure in Town A and Town B (Please keep 4 decimal places for all percentages and 2 decimal places for Gini coefficients. You must show necessary working steps). [10 marks]

B. Comment on the differences in Gini Coefficients obtained in part 1). [2 marks]

C. Assuming the level of income for persons in these two towns will increase in the next year due to improved availability of employment opportunities, discuss the relationship between the increase in income and their expenditure on leisure activities in comparison with their expenditure on food and rent. [2 marks]

Question 3 [10 marks]

Presented below in Table 1 are the US Department of Commerce (DOC) household expenditure equivalence units and in Table 2 are the average number of people in household and the annual household expenditure by the age of household head.

Table 1

Household size US DOC Household expenditure equivalence units Increment

1 1.00

2 1.28 0.28

3 1.57 0.29

4 2.01 0.44

5 2.37 0.36

Table 2

Age of household head Average number of

people in household Annual household expenditure Equivalent average annual household expenditure ($)

25 2 25,500 ?

25-34 2.8 48,600 ?

35-44 3.1 59,600 ?

45-54 2.9 59,210 ?

55-64 2.3 55,300 ?

65-74 1.7 40,800 ?

74 1.5 27,600 ?

A. Using the US Department of Commerce (DOC) household expenditure equivalence units, estimate the equivalent average annual household expenditure in households headed by people in each age group, taking into account the average number of people in the household. Please leave answers to 2 decimal places. [7 marks]

B. Comment on the rationale of using household expenditure equivalence units in estimating equivalent average annual household expenditure. [3 marks]

Question 4 [15 marks]

Write a short essay of 800 words on “The impacts of population growth on food consumption, income per capita growth, and sustainability”. You are expected to refer to at least three additional references other than the prescribed readings (chapters in the text book, lecture notes or recommended readings in lecture notes). It is expected that a suitable referencing style (including in-text references) is to be used, such as Harvard referencing, American Psychological Association (APA) referencing style, or a style suitable in your disciplinary areas. The essay will be assessed by its clarity of discussion, relevance and extensiveness of reference.