Economics

Coursework 1#
(40% final mark)

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

Submission deadline: Monday, 20 November 2017, 5:00 PM

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