Vol 3 Test 1 Part 3

Section three.

Following instructions from their tutor, you will hear two economic students called James and Anna discussing a recent survey about the cost of buying a house in New Zealand.

First you have some time to look at questions 21 to 25 on page six.

Now listen carefully and answer questions 21 to 25.

Tutor: Okay, for this week's assignment, you're going to assess the value survey on house prices.

Tutor: What were the survey's findings?

Tutor: Was it a reliable survey?

Tutor: Work in pairs.

Tutor: Discuss what you've read and generate some ideas for the assignment.

James: All right. Shall we work together, Anna?

Anna: Sure, James.

James: So first, how did the Value Survey actually measure the cost of houses?

James: Because there are lots of ways of calculating it.

Anna: Well, it looked at all houses, didn't it? New and old.

Anna: So it started with average incomes across the whole workforce, and then worked out house prices in relation to that.

Anna: I mean, to what people were earning.

James: So it's about affordability, what people pay in real terms.

James: There's no information about the size of a house a typical family can buy.

Anna: No, that's a limitation.

James: Okay, then, in the assignment, we should give some background.

James: I mean, what's different about the Value Survey?

Anna: Yeah, there's lots of surveys every year.

Anna: Value is actually one of the newer ones.

Anna: But it stands out because it gives figures for a range of the largest urban centres, which none of the others do.

James: Okay, good point.

James: Then one finding was that New Zealand houses are relatively expensive.

James: Why is that?

Anna: Because most of them are built of wood.

Anna: And that's quite cheap.

James: Yeah, it is.

James: But the problem is, there are too many regulations and restrictions about where you can build.

James: So if more building sites were created for housing, the costs would come down.

Anna: That's it, isn't it?

Anna: Because there are plenty of contractors ready to do the work.

James: Exactly.

James: So what else?

Anna: Well, what about transport?

Anna: I mean, it's all very well to talk about new housing.

Anna: But how are people going to get there?

Anna: Is the survey proposing new roads, new rail networks?

Anna: It should be a coordinated approach.

James: Yeah, but the survey didn't mention it.

James: It's a missed opportunity.

James: Because a commitment to funding public transport from the outset would improve air quality in our cities.

Anna: True.

James: Okay, then, the next survey.

James: What can we expect?

Anna: A look at all the same places.

Anna: Right, exactly the same.

Anna: But the next one will give an idea of the way prices are moving.

Anna: The government may have to think about how house prices are affecting society.

Before you hear the rest of the discussion, you have some time to look at questions 26 to 30 on page seven.

Now listen and answer questions 26 to 30.

James: Then, in the assignment, we need to evaluate how reliable the survey was.

James: So we should look at some of the criticism made by commentators.

Anna: Okay.

James: So there's the economist Andrew Coleman.

James: He actually questioned whether the survey was money well spent.

James: Because it only looked at a single year in isolation.

James: A year when it was difficult to borrow money to buy a house, pushing up costs.

James: So he thought the survey should consider a longer timeframe.

Anna: Did you get that article by Professor Mercy?

Anna: Because he's the leading authority on this topic.

James: Yeah, interesting.

James: He realised the method used to calculate how much money people had didn't take savings into account.

James: So actually, people looking for a house were richer than the survey shows.

James: Making houses cheaper in real terms.

Anna: All right.

Anna: Then Richard Bernard.

Anna: His criticism was original.

Anna: He found out they were using quite outdated software to process all the information they gathered.

Anna: Which was crazy.

Anna: Because they actually had the money available for an upgrade.

Anna: So even though it was a highly regarded team of people, the way the statistics were interpreted was open to question.

James: Okay, then Professor Rounds.

James: He thought the report was just badly written.

Anna: That's right.

Anna: After all the work that went into gathering valid information, the finished report was just too long and weakly structured.

Anna: And there was too much unnecessary detail.

James: And the last one, Maria Darling.

James: She made a point about the properties that were evaluated.

Anna: There weren't enough of them?

James: No, it wasn't that.

James: They were never identified for privacy reasons.

James: But she thought the actual properties used should have been revealed.

James: You know, the process should have been transparent if people are going to have full confidence in the survey.

Anna: Right.

Anna: So a lot of criticism.

James: Yeah, but this sort of research is often controversial.

That is the end of section three.

You now have half a minute to check your answers.