GEUC 4011 Senior Final Year Project Lily Chia-Hsun Lee Karen Wenyu Jiang William Strutt Louie Dokyun...
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Transcript of GEUC 4011 Senior Final Year Project Lily Chia-Hsun Lee Karen Wenyu Jiang William Strutt Louie Dokyun...
GEUC 4011Senior Final Year Project
Lily Chia-Hsun LeeKaren Wenyu Jiang
William StruttLouie Dokyun Kang
Road Map
• Research Question• US Politics• Literature Review• Methodology• Results
Research Question Hypothesis
The correlation between the variation of real estate prices and the voter preferences in the USA.
The more unstable the housing variation is, the more likely the Democratic party will gain the majority party.
Characteristics of US Politics
• Two major political parties
• The House of Representatives
• The United States Senate
• Voting System of the two Houses
Democratic
a) Liberal b) Left Wingc) Famous democrats: Kennedy, Franklin Roosevelt, Bill Clinton,
Obama.
1) Favour on higher minimum wages.2) Increase in government spending3) Less on military expenditure 4) Tax Equality, government welfare5) Viewed as environmentalists, however there is contradiction
Republican
• Conservative • Right Wing • Famous Republicans: Teddy Roosevelt, Ronald
Reagan, George Bush, Abraham Lincoln, Richard Nixon
• Military Expenditure• Less on government welfare and support. • Mixed Environmental Stance
House of Representatives
• Power to pass legislation• Impeach officials• Initiate revenue bills • Power to elect the President if no majority
vote is achieved
United States Senate
• Trial of impeached officials• Consent and advice of treaties• Appointment of US officials• Each state represented by two senators
regardless of population.
Compare and Contrast
House
• Larger (435 seats)• Shorter service term (2 years) • More restraint • Narrow constituency • Specialists • Less media coverage • Less "prestigious"• Expeditious debate • More partisan
Senate
• Smaller (100 seats)• Longer service term (6
years)• Less restraint• Broader constituency • Generalists • High media coverage • More "prestigious"• Slow debate • Less partisan
Service Term Differences
Senate
• Staggered service of 6 years • Separated into classes• Elections in November in even numbered years
House
• Service of 2 years• Election time coincides with Senate election • Primary Election Method
Constituency of the HousesRepresentatives Senate
Narrow Constituency“Single” Member” District District Focused
Broad ConstituencyPrimary ElectionGeneral ElectionPopular Vote
Democrat Republican
Philosophy Liberal Conservative
Economic Ideas Favor minimum wages and progressive taxation. i.e. higher tax rates for higher income brackets.
Believe taxes shouldn’t be increased for anyone (including the wealthy) and that wages should be set by the free market.
Stand on Military issues
Decreased spending Increased spending
Stand on gay marriage
Support (some democrats disagree) Oppose (some Republicans disagree)
Stand on abortion Should not be made illegal; support Roe v. Wade (some Democrats disagree)
Should not be legal; oppose Roe v. Wade(some Republicans disagree)
Stand on Death penalty
While support for the death penalty is strong among Democrats, opponents of the death penalty are a substantial fraction of the democratic base.
A large majority of Republicans support the death penalty.
Social and human ideas
Based on community and social responsibility
Based on individual rights and justice
• Economist, Nobel laureate, and Democratic Party member Joseph Stiglitz blamed the Bush/Greenspan tax cuts designed to benefit the richest Americans but not to lift the economy out of the recession that followed the collapse of the Internet bubble, forcing Greenspan to then cut rates to maintain growth and employment
Jimmy Carter(1977-1980)
Bill Clinton(1993-2000)
Ronald Reagan(1981-1988)
George H. W. bush(1989-1992)
George W. Bush(2001-2008)
Barack Obama(2009-Present)
List of presidents of the United States (1980 - 2012)
Influential changes & Registrations in housing price between 1980 - 2012
Jimmy Carter(1977-1980)
1980: The Depository Institutions Deregulation and Monetary Control Act of 1980 granted all thrifts
Ronald Reagan(1981-1988)
1986: The Tax Reform Act
1986–1991: New homes constructed dropped from 1.8 to 1 million, the lowest rated since World War II.
George H. W. bush(1989-1992)
1991: US recession, new construction prices fall
Bill Clinton(1993-2000)
1994–1997: Flat Housing prices.
1995: New Community Reinvestment Act regulations break down home-loan data by neighborhood, income, and race
1998: "Financial Services Modernization Act" killed in Senate because of no restrictions on Community Reinvestment Act-related community groups written into law.
George W. Bush(2001-2008)
1997–2005:Mortgage fraud increased by 1,411 percent.
President G.W. Bush sets goal of increasing minority home owners by at least 5.5 million
2007 Subprime mortgage financial crisis Subprime industry collapse.
Barack Obama(2009-Present)
March 1–June 18: 406 people were arrested for mortgage fraud in an FBI sting across the U.S., including buyers, sellers and others across the wide-ranging mortgage industry.
Methodology
• Correlation vs. Causation • Linear regression
– P value– R value
• Data – Variation
• Results – Variation 1, 2, 3 – Quarterly variation
Correlation Vs Causation
Correlationstatistical relationship
between two variables
Causationrelationship where one
variable causes a change in another variable
Correlation Causation
Spurious Factor
X Y
Z
Economy Democracy
Women’s rights
?
Linear regressionModeling the relationship between two
variables
P valuePercentage chance that the results of a statistical test are due to random error
Shows the significance of the data
P value threshold in social science: 0.05
R value• Coefficient of determination
• Strong/ weak correlation
Correlation Negative Positive
None -0.09 to 0.0 0.0 to 0.09
Small -0.3 to -0.1 0.1 to 0.3
Medium -0.5 to -0.3 0.3 to 0.5
Strong -1.0 to -0.5 0.5 to 1.0
010
2030
4050
y1
0 2 4 6 8 10x
02
46
810
y5
0 2 4 6 8 10x
-40
-20
020
40y3
0 2 4 6 8 10x
Case-Shiller Home Price Indices
•The indices are calculated on sales of single-family homes, an approach developed by economists Karl Case, Robert Shiller and Allan Weiss.
• It includes a national home price index, a 20-city composite index, a 10-city composite index and 20 individual metro area indices.
•The national home price index is currently released by Stand & Poor every quarter.
Case-Shiller Home Price Index
Year Nominal Price Index
CPIReal Price
Index
1890 3.66 7.61 100.00
1891 3.30 7.80 88.01
1892 3.36 7.33 95.42
1893 3.50 7.90 92.30
1894 4.08 6.85 123.98
1895 3.70 6.57 117.46
1896 3.21 6.66 100.30
1897 3.31 6.47 106.52
1898 3.53 6.66 110.18
1899 3.37 6.76 103.85
1900 3.85 7.90 101.57
1901 3.23 7.71 87.33
1902 3.81 7.90 100.47
1903 3.87 8.66 93.07
1904 4.05 8.28 101.85
Case-Shiller Home Price Indices
Index Variation
• The biggest Variation between the two years
• The biggest variation of this year
• The biggest variation of last year
Index Variation 1
Real Price Index
2009.1 127.3263
2009.2 129.9978
2009.3 132.8987
2009.4 130.9275
2010.1 126.9637
2010.2 132.0134
2010.3 129.5778
2010.4 124.6619
124.6619
132.8987
132.8987-124.6619=8.2368
Index Variation 2
Real Price Index
2010.1 126.9637
2010.2 132.0134
2010.3 129.5778
2010.4 124.6619
124.6619
132.8987
132.8987-124.6619=8.2368
Index Variation 3
Real Price Index
2009.1 127.3263
2009.2 129.9978
2009.3 132.8987
2009.4 130.9275
127.3263
132.8987
132.8987-127.3263=5.5724
Voting Preference
Republican 0
Democratic1
262/435=0.6023
Linear Regression Result
1950-2010
House vs
Variation1
Correlation Coefficient = 0.1212
P = 0.515
House vs
Variation2
Correlation Coefficient = 0.1625
P = 0.383
House vs
Variation3
Correlation Coefficient = 0.1072
P = 0.566
Quarterly Regression
Quarter 1 January to March
Quarter 2 April to June
Quarter 3 July to September
Quarter 4 October to December
1950 to 2010Senate
P value R value
Quarter 1 0.418 0.157Quarter 2 0.147 0.276Quarter 3 0.212 0.239Quarter 4 0.680 0.08
Correlation Negative Positive
None -0.09 to 0.0 0.0 to 0.09
Small -0.3 to -0.1 0.1 to 0.3
Medium -0.5 to -0.3 0.3 to 0.5
Strong -1.0 to -0.5 0.5 to 1.0
1980 to 2010Senate
P value R value Quarter 1 0.048 0.501Quarter 2 0.440 0.208Quarter 3 0.060 0.481Quarter 4 0.030 0.543
Correlation Negative Positive
None -0.09 to 0.0 0.0 to 0.09
Small -0.3 to -0.1 0.1 to 0.3
Medium -0.5 to -0.3 0.3 to 0.5
Strong -1.0 to -0.5 0.5 to 1.0
1950 to 2010House of Representatives
P value R ValueQuarter 1 0.265 0.214Quarter 2 0.138 0.282Quarter 3 0.025 0.416
Quarter 4 0.446 0.147
Correlation Negative Positive
None -0.09 to 0.0 0.0 to 0.09
Small -0.3 to -0.1 0.1 to 0.3
Medium -0.5 to -0.3 0.3 to 0.5
Strong -1.0 to -0.5 0.5 to 1.0
1980 to 2010House of Representative
P value R valueQuarter 1 0.101 0.425Quarter 2 0.168 0.363Quarter 3 0.018 0.583
Quarter 4 0.065 0.471Correlation Negative Positive
None -0.09 to 0.0 0.0 to 0.09
Small -0.3 to -0.1 0.1 to 0.3
Medium -0.5 to -0.3 0.3 to 0.5
Strong -1.0 to -0.5 0.5 to 1.0
Bigger Picture
Voting Behavior
The Bigger Picture
long term factors• Party identification model
– attachment to party• Social environment: education, ethnicity, religion, gender
Short term factors• Rational choice model
– Voters are rational actors, judgment based on factors….
• Party image• Current issue• policies
END