101LONJANAPR2016
Economics

Coursework 1#
(40% final mark)

Title: Property prices, cost of living and migration in London
Introduction

When Google wants to transfer an employee from its Washington D.C. office to its London branch, it has to decide how much compensation to offer the worker to move. Workers are not always enthusiastic about being transferred. Typically, many international businesses assess the goods and services consumed by workers in their original location and then pay enough to allow these employees to consume essentially the same items in the new location. According to a recent report by Boston Consulting Group, in a poll of 200,000 people in 189 countries nearly one in six want to come to London to work (ahead of New York and Paris). This clearly places London as a truly global city, and as a clear preference for a large majority of expatriate workers to move. It is often argued that the key reason behind this preference is London’s high standard of living, for which they can justify the city’s high cost of living as long as their company’s placement policy covers such expenses.

There is, however, another side of the story about the cost of living in London. During the past two decades, many locals found the cost of living overwhelmingly high and therefore decided to move away from London. One of the key factors which account for a high cost of living in London is the rapidly growing property prices, and very limited support and contribution available for local employees towards such expenses. It is often argued that the London weighing of salaries are insufficient, and workers based in London never find any support from their employers towards their housing and other overheads.

Such contrasting evidence of migration (or the willingness of it) to and away from London by expatriate workers and locals has led to a live debate about the perception related to the property prices and cost of living in London.

You will prepare a business standard report on this live debate. The report constitutes your coursework which is weighed 40% of your final mark in this module.

Context

You are an economist, and you have been asked to write a report on the debate about property prices, cost of living and migration in London. You have decided not to write a general explanation, but rather, a report that uses the language of and analysis of economics.

Preparation & Research

Research your report by first reviewing the following news articles:

http://www.theguardian.com/uk-news/2015/jun/29/goodbye-london-moving-to-brighton-house-prices

http://www.telegraph.co.uk/finance/jobs/11142074/London-is-most-desirable-global-city-to-move-to-for-work.html

http://www.bbc.co.uk/news/uk-21511904

http://economicsnetwork.ac.uk/links/data_free#UK_house_prices
You are then advised to consult other articles/materials from the following sources

http://www.bbc.co.uk/

http://theconversation.com/uk

http://www.theguardian.com/uk

http://www.economist.com/

http://www.ft.com/home/uk

http://www.numbeo.com/property-investment/
and any other sources of similar weight and standard, as you deem necessary.
Word count

Your report should not exceed 2000 words.
Essentials for the report
1. Cover page including:
a. Module name and number
b. Tutor
c. Coursework title
d. Student name and number
2. Numbered bottom right pages
3. Preamble
a. The purpose of the report
b. The importance of the issue and the report
c. Key findings
4. Sub headings
5. Illustrations (graph, table, and relevant pictures)
6. Recommendations to the UK Government
7. Conclusions, i.e. other recommendations and observations
8. Reflections on general learning, preparation, formatting, researching
9. References
10. Appendix

Marking schedule

(i) Meaningful and concise preamble 10
(ii) Explanation of the economic functioning of the London property market, by illustrating the following terminologies such as:
a. demand and supply,
b. price mechanism,
c. private sector incentives,
d. market equilibrium,
e. equilibrium price and quantity. 10
(iii) Explanation of the demographic demand pattern and expatriate demand pattern. 10
(iv) Explanation of possible causes for and effects of shifts in demand and supply in this market. 10
(v) Comparison with cost of living in another major global city, illustrate and explain:
a. own price,
b. income elasticity 10
(vi) Explanation of all possible types of market failures for London property market. 5
(vii) List of government intervention options to correct such market failures. 5
(viii) Description of how such government interventions could affect demand for and/or supply of property in London. 10
(ix) Recommendations to the UK government. 10
(x) Appropriate sources for your analysis. 5
(xi) Coventry University Harvard style. 5
(xii) Format 5
(xiii) Reflections 5
Notes
This assignment accounts for 40% of the module mark.
Final submission date: see Moodle