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Eco-30043 Economic and Business Forecasting Assignment 2012/13 A year ago you were hired as an entry-level assistant business analyst by an advertising agency. Last week, top management requested a review of household consumption behaviour in the United Kingdom. They are particularly interested in whether the recent financial crisis and the economic recession that followed, have permanently altered consumption patterns in the country. The chief analyst, and head of your department, holds a briefing with the entire team in order to assign tasks. You have been asked to do what you have been doing since day one, which is secondary data collection. Confident in your abilities, you see this as an opportunity to gain a more substantive role within the department. You argue that you can provide a thorough and sophisticated analysis of consumer expenditure, complete with reliable forecasts for the foreseeable future. You suggest preparing a report on the analysis of only a subset of goods and services to showcase your technical and analytical skills. The chief analyst agrees to consider your work. If the report you present is at par with the required standard, both in technical detail and analytical discussion, you would be assigned a more prestigious role in the larger scale project, which could lead to a promotion within the department to a more senior level. You are forwarded the data file report1213.dta, which contains, among other, information on UK household expenditure on certain ‘items’ from a wider survey of Consumer Trends in the country. Your task is to write a report comprising an analysis and forecasts, of three (3) household expenditure items. There are certain additional conditions: In the report you should demonstrate your forecasting skills by producing 2 year forecasts using appropriate forecasting techniques. Each expenditure item has to be forecasted with

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