Spatial and temporal variation of house prices

This thesis originally developed a spatial and temporal analysis approach. This approach was applied to investigate the variation of house prices in Australia. The findings discovered the behaviours of house prices and the interconnections between them across the Australian cities.

Empirical applications of economic principles in producer price index analysis

The research analyses economic linkages of producer price indices of the construction industry in Australia and relationships between construction and house prices. A range of econometric techniques are applied to analyse construction and house prices. The economic equilibrium and dynamic relationships among regional markets are investigated based on producer price index analysis.

Reading house prices in Australian capital cities

House prices in the Australian capital cities have been increasing over the last two decades. An over 10% average annual increase arises in the capital cities. In Melbourne, Brisbane and Perth, the house prices increased by more than 15% annually, while the house prices in Darwin increased by even higher at about 21%. It is surprising that, after a decrease in 2008, the house prices in the Australian capital cities show a strong recovery in their last financial year’s increase. How to read the house prices in cities across a country has been an issue of public interest since the late 1980s. Various models were developed to investigate the behaviours of house prices over time or space. A spatio-temporal model, introduced in recent literature, appears advantages in accounting for the spatial effects on house prices. However, the decay of temporal effects and temporal dynamics of the spatial effects cannot be addressed by the spatio-temporal model. This research will suggest a three-part decomposition framework in reading urban house price behaviours. Based on the spatio-temporal model, a time weighted spatio-temporal model is developed. This new model assumes that an urban house price movement should be decomposed by urban characterised factors, time correlated factors and space correlated factors. A time weighted is constructed to capture the temporal decay of the time correlated effects, while a spatio-temporal weight is constructed to account for the timevaried space correlated effects. The house prices of the Australian capital cities are investigated by using the time weighted spatio-temporal model. The empirical findings suggest that the housing markets should be clustered by their geographic locations. The rest parts of this paper are organised as follows. The following section will present a principle for reading urban house prices. The next section will outline the methodologies modelling the time weighted spatio-temporal model. The subsequent section will report the relative data and empirical results, while the final section will generate the conclusions.

Impact of tobacco tax reforms on tobacco prices and tobacco use in Australia

OBJECTIVE: To document the impact of changes to tobacco taxes on the range and price of tobacco sold during the period when the National Tobacco Campaign (NTC) was run.

DATA SOURCES: Information about brand availability, pack size, and price was extracted from Australian Retail Tobacconist. A retail observational survey was undertaken to monitor actual retail prices. Data on cigarette prices, brands, packet configurations, and outlets from which they were purchased were obtained from the benchmark and three follow up population telephone surveys conducted to evaluate the NTC.

METHOD: Data from the three sources were compared to see the extent to which the impact of tax changes had been offset by greater retail discounting and a more concerted effort by consumers to purchase cheaper products.

RESULTS: Smokers were unable to cushion themselves from the sharp price increases that occurred during the third phase of the NTC. Both average recommended retail prices of manufactured cigarettes and average actual cigarette prices paid by smokers increased by 25% in real prices.

CONCLUSION: The fall in smoking prevalence over the first two phases of the NTC was substantially greater than would be expected due to tax changes alone. The fall in smoking consumption over the first two phases was slightly less than would be expected and in the third considerably higher than would be expected.

High prices for generics in Australia : more competition might help

It is commonly believed that dispensed prices of medicines in Australia are substantially lower than those in other developed countries, particularly the US. This article reports the results of an analysis comparing dispensed prices for the most commonly prescribed and the highest cost items in Australia with dispensed prices in the US. Although a large majority of items are less expensive in Australia than in the US, Australian prices are higher for a substantial number of products, particularly generic drugs. This article examines various policies affecting the pricing of generics in Australia. It is postulated that the main cause for higher prices for a substantial number of generic products is the lack of price competition. This results from government policy which ensures that a price reduction by one company is communicated immediately to all competitors in that market along with an invitation to match the reduced price. The dominant strategy for all suppliers is to only reduce their price in response to a reduction in price by a competitor. The result is a lack of differentiation in pricing across brands of a medicine on the Schedule of Pharmaceutical Benefits. The government could improve the structure of the generics market and encourage greater competition by ceasing to disclose competitor firms’ offers to other competitors. The government could conduct pricing reviews of each generic product relatively infrequently (eg, only once annually or every 18 months). At the time of the pricing review, the government would request confidential offers on price for a generic from all players in the market. Brands should then all be listed under the Pharmaceutical Benefits Scheme (PBS) at the offered price. Prices offered by the individual supplier would apply until the next pricing review. The PBS would continue to subsidise up to the price of the lowest priced brand, with brand premiums applying to all brands priced higher than the benchmark price. Such an approach would provide opportunity for players in the market to capture market share by being thelowest priced brand.

Investigating relationships of construction prices in Australia using cointegration analysis

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Finds of this study reveal that the economic system in which the construction industry participants operate is characterized by a highly competitive, integrated marketplace, Especially in Melbourne and Sydney. But exclude Northern Territory and Queensland. Furthermore, the results of long term relationships estimation suggest that there are 15 pairs of regional construction prices have long term equilibrium relationships. Additionally, the causalities and diffusion among the construction price indices in six states and two territories of Australia are estimated in this study. These outcomes suggest that causal links between regions mainly exist among adjoining states.

An economic analysis of construction industries producer prices in Australia

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach and error correction model. The cointegration relationships amongst the regional construction prices are detected in this study. The application of the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Results of this study suggest that the economic system in which construction industry participants operate is characterised by a highly competitive integrated marketplace. Furthermore, the causalities and diffusion patterns among the construction price indices in six states and two territories of Australia are drawn by the cointegration analysis. These outcomes reveal a pattern of diffusion paths and network linkages among the six states and two territories, and then expose the regional price linkages.

lnvestigating spatial linkages of construction prices in Australia's regions

Linkages among different construction markets have attracted great of attention from the construction economist. With notable exceptions, most of this infestation has carried out by using input-output analysis. Interactions among regional construction markets have been discussed in few studies and none of them investigate spatial effects on the regional construction markets. This study employed spatial econometric techniques, spatial autocorrelation and convergence tests, to analysis interactions and linkages among construction price indices in Australian six states and two territories. The empirical results indicate the presence of significant positive spatial correlation between the construction prices in Australian eight construction markets and the degree of dependence decrease sufficiently quickly as the space between units increase. The results of convergence test further present evidence on "ripple effect" in the construction prices in Australian regional markets and the changes in regional construction price would positively influence neighboring states first, and then spread out into others, and then the regional prices converge and reach a long-run equilibrium in the following quarters. Urban development policymakers and construction developers could benefit from the analysis of spatial linkages in regional construction markets.

Generic drug prices and policy in Australia: room for improvement? A comparative analysis with England

To assess the degree to which reimbursement prices in Australia and England differ for a range of generic drugs, and to analyse the supply- and demand-side factors that may contribute to these differences.

Changes in use of types of tobacco products by pack sizes and price segments, prices paid and consumption following the introduction of plain packaging in Australia

Objectives: To describe changes among smokers in use of various types of tobacco products, reported prices paid and cigarette consumption following the standardisation of tobacco packaging in Australia.
Methods: National cross-sectional telephone surveys of adult smokers were conducted from April 2012 (6 months before transition to plain packaging (PP) to March 2014 (15 months afterwards). Multivariable logistics regression assessed changes in products, brands and pack types/sizes; multivariable linear regression examined changes in inflation-adjusted prices paid and reported cigarette consumption between the pre-PP and three subsequent periods – the transition phase, PP year 1 and PP post-tax (post a 12.5% tax increase in December 2013).
Results: The proposition of current smokers using roll-your-own (RYO) products fluctuated over the study period. Proportions using value brands of factory-made (FM) cigarettes increased from pre-PP (21.4%) to PP year 1 (25.5%; p=0.002) and PP post-tax (27.8%; p<0.001). Inflation-adjusted prices paid increased in the PP year 1 and PP post-tax phases; the largest increases were among premium FM brands, the smallest among value brands. Consumption did not change in PP year 1 among daily, regular or current smokers declined significantly in PP post-tax (mean=14.0, SE=0.33) compared to PP year 1 (mean=14.8, SE=0.17; p=0.037).
Conclusions: Introduction of PP was associated with an increase in use of value brands, likely due to increased numbers available and smaller increases in prices for value relative to premium brands. Reported consumption declined following the December 2013 tax increase.

Counting the cost: the impact of cinema ticket prices in Australia

The authors discuss the change in cinema ticket price and its effect on audience perception on cinema attendance in Australia. Topics discussed include the comparison of ticket prices in Australia to countries such as the U.S., Japan, and New Zealand, the reason of high ticket prices in Australia such as high wages in theatre operation and piracy, and the drop of cinema admission as result of high ticket prices. They mention the social equity issues raised by the high cost of cinema tickets.

A range of factors influencing Sydney dwelling sale prices

This paper presents findings from an evaluation of a range of factors considered to influence dwelling sale prices in Sydney. The aim is to determine whether factors such as dwelling type, location, population structure and sales transaction type. significantly influence dwelling sale prices in Sydney. A review of the local market literature reveals that this belief has not been validated in the recent times. Hence, some of these factors may be inadequately exploited by dwelling investors. A sample of 33 dwelling Units from eight randomly selected suburbs located within 20kms of the Sydney Central Business District (CBD) was studied, and data analysed using simple Pearson's correlation. Significant associations were only found between Australian-born population proportion and dwelling type, and the sale prices. Hence, within the scope and methodology limitations. This paper concludes that, while dwelling type and Australian-born population proportion of a suburb are significantly associated with dwelling sale prices, location. population density and sales transaction type, are virtually not, as earlier held. The implication is for the amount of effort expended on location models, sales transaction marketing and population size studies. to be reviewed, at least, in relation to dwellings. This message resonates to cities and locations of similar characteristics as Sydney.

Housing price diffusion pattern of Australia's state capital cities

The ripple effect of house prices within metropolitan areas has recently been recognised by researchers. However, it is very difficult to formulate and measure this effect using conventional house price theories particularly in consideration of the spatial locations of cities. Based on econometrics principles of the cointegration test and the error correction model, this research develops an innovative approach to quantitatively examine the diffusion patterns of house prices in mega-cities of a country. Taking Australia's eight capital cities as an example, the proposed approach is validated in terms of an empirical study. The results show that a 1-1-2-4 diffusion pattern exists within these cities. Sydney is on the top tier with Melbourne in the second; Perth and Adelaide are in the third level and the other four cities lie on the bottom. This research may be applied to predict the regional housing market behavior in a country.