A Sample Regressional Analysis : IKHM
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On the other hand, data classified on the basis of time intervals constitute vital information in the control of business activity, since this is the most effective method of showing the changes that are taking place in business, an industry or in total economic activity. Closely related to the problem of measuring changes in business activity is the making of forecasts of future activity. Actually, the management of business operations requires a continual making of decisions regarding the future and basis for such forecasts is the record of past performance.
Since this paper aims to determine or forecasts the maintenance expenditure with respect to the home value then the use of Method of Least Squares was performed. Basically, if a straight line assured, the line of trend will have a formula (Guilford & Fruchter, 1973):
In this formula the value of a and b must be determined. The principle of least square states that a trend best fit a given set of values when the constants of the equation are chosen so that the sum of the squares of the deviations between the original data and the corresponding trend values are a minimum (Guilford & Fruchter, 1973). If the line fits the data perfectly, each point will lie on the line and the sum of the squares of the deviations will be zero. The farther the points are from the trend, the larger will the deviations, although the line may still be fitted so that these squared deviations will be a minimum.
In order to find these values for a and b by the method of least squares, it is necessary to solve the following normal equations in which time is designated by X and the values in the series by Y (Guilford & Fruchter, 1973).
The procedure may be simplified by arbitrarily shifting the origin of the series ( in the middle year for an odd number of years between the two centre years for an even number of years) in this way so that , the preceding equation can be reduced to
After the values of a and b are determined, it then becomes possible with the use of the equation, , to compute the actual trend values (Guilford & Fruchter, 1973). With the help of SPSS program, the following values are generated.
Table 3 Model Summary
This table displays R, R squared, adjusted R squared, and the standard error. Actually, the R-value is correlation coefficient. It is the correlation between the observed and predicted values of the dependent variable. The values of R for models produced by the regression procedure range from 0 to 1. Larger values of R indicate stronger relationships. R squared on the other hand is the proportion of variation in the dependent variable explained by the regression model. The values of R squared range from 0 to 1 (Guilford & Fruchter, 1973). Small values indicate that the model does not fit the data well. The sample R squared tends to optimistically estimate how well the models fits the population(Guilford & Fruchter, 1973). Adjusted R squared attempts to correct R squared to more closely reflect the goodness of fit of the model in the population(Guilford & Fruchter, 1973).
Table 4. Coefficients
The unstandardized coefficients are the coefficients of the estimated regression model. In our data, the estimated model is Value of Home = 620.099 + 123 Maintenance Expenditure. Often the independent variables are measures in different units. The standardized coefficients or betas are an attempt to make the regression coefficients more comparable.
Thus, the equation model will then be read:
Y= 620.099 +.123X where y=value of home and X =expenditures
Figure 1. Time Series Chart
Using the model equation Y= 620.099 + .123X, we can now predict the Home Value. For example, the maintenance expenses of the owner is $10,000. Using the model equation Y= 620.099 + .123X we have:
Y= 620.099 + .123X
Y= 620.099 + .123($10,000)
This indicates that the possible home value of the owner is 1850.099 (thousands of dollar) if his/her expenses in maintenance reaches $10,000. Despite of this, there are other factors that might contribute to the home maintenance expenses and home value and these are depending on the economy of Hong Kong.
Actually, as of 2009, Hong Kong has ranked as the world's freest economy in the Heritage Foundation's Economic Freedom Index and Wall Street Journal for 15 consecutive years, since the beginning of the index in 1995 (Heritage Foundation 2009). The Index measures limitations on trade, business, finance, investment, labour and property rights and considers the effect of government size, corruption and monetary controls in 183 economies. And from their report, Hong Kong is the only one to have ever scored 90 points or above on the 100 point scale.
Actually, the growing interest and dependence of several Hong Kong companies on Home products and services market is attributable to the current status of their economy. Based from the results showed in the Hong Kong Property Market Annual Report for 2003-2004, the economy of the country has grown steadily by 4.5% during the 2003’s first quarter and for 2009, Hong Kong still grow continuously despite of the current financial crisis in Unites States (Economic Overview, 2009). This growth was brought about by main driving forces such as external trade. For review, during the year’s second quarter of 2003 there are some problems arise due to SARS issues. During the outbreak in 2003, several organizations had reduced their GDP forecast for Hong Kong (SARS Expert Committee, 2005). The SARS outbreak had even stressed on the recession of the country’s economy. By April of the said year, the country was able to see and feel the impact of the disease as more and more companies at the local and overseas level had lessened, causing unfavourable business environment (SARS Expert Committee, 2005). While the disease had greatly affected the economy, resulting to a .5% decrease in GDP from the first quarter, the expected reduction was worst than the actual outcome; hence, most organization had revised their GDP forecast for the year (SARS Expert Committee, 2005). Mainland China had been giving full support to Hong Kong during the SARS outbreak through the provision of financial aids and medical needs. Eventually, the retail market of Hong Kong had grown rapidly (SARS Expert Committee, 2005). Some retailers had even expanded or planned to expand their retail spaces in major street areas like Mongkok as well as in major shopping malls. This progressing trend had increased dramatically.
Through the existence and help of CEPA or Closer Economic Partnership Arrangement, international investors had started to expand their business in Hong Kong to represent flagships and stepping stones between China and the rest of the world. The SARS outbreak had led to consumer purchasing trends, particularly on health products. Throughout the year, Hong Kong was able to experience continuous growth in the retailing aspect.
The property market had constantly increased in 2007. Such increasing trend is likely to be carried over in 2009 as shown in the results of Hong Kong Property Market Annual Report for 2007-2008 (Economic Overview2009). The following are the summary of the current status of the various aspects of property market in Hong Kong.
Luxury Residential Market. Throughout year 2008, the luxury leasing market of Hong Kong has shown a stable and fair performance in spite of the current global financial crisis. In comparison to other property types, luxury leasing activity appeared to be the least affected by the global recession (Hong Kong Trade Development Council, 2009).
Mass Residential Market. The progress in mass residential sales market is brought about by investors in Mainland China and other parts of the world. This again is facilitated by the 24 hour Huanggang Port border-crossing services. Other developments that had led to this progress include the Individual Travel Scheme for Mainland tourists which began in August and the Capital Investment Entrant Scheme, which started in October 2003. Common trend observed under this property market type was that Mainlanders were more into units in the New Territories, the foreigners and immigrants were more interested in high-end mass residential properties. In January 2003, sales in mass residential properties had resulted to significant benefits and positive impact to the nine residential property market of the government (The Hong Kong Government Privatisation Challenge, 2004). The launch of the West Rail and Tseung Kwan O Rail had increased the secondary sales in estates along the stations, reducing the gap between the primary and secondary prices in the New Territories (The Hong Kong Government Privatisation Challenge, 2004).
Indeed, Hong Kong has witnessed and experienced substantial development in the aspect of facility and property management as seen in the progress of IK Home Products. From the economic overview and status of Hong Kong, it is likely that the country will further enhance its access to this industry. In the future, the development of property management is expected to improve further due to several reasons. As business trends continue to evolve, the goals of property management in which IK Home Products belongs is likely to change as well. For instance, in addition to being quality driven, FM will also be applied as companies put significant stress on prioritizing customers. Companies are focusing more on their core business activities; hence, property management will develop more under the influence of outsourcing. Employee management is also becoming more significant as companies are more particular on the competency levels of their workforce. This in turn will lead to higher interest on facility management in the coming years. While these significant points are likely to take place in Hong Kong as well as in other nations implementing facility management, nations worldwide should still consider the application of various success factors involved in property management. In addition, it should be noted that the maximization of these positive effects is hugely dependent on economic outcomes.
Actually, property management practice has been largely dependent on the designing of strategies and methods after careful assessment of the needs and the improvements that could be done in the company. However, there are limitations on their part. Foremost of which is the lack of proper training and education for most managers. This area is a relatively young field and at most scholars are yet to formulate much needed paradigms and researchers that could best address specific issues in the workplace. Moreover, most company managements are still hesitant in fully implementing this strategy because of the short-term costs that it may give to the company. For small companies and unstable firms, this may mean a severe blow to their financial means.
Further, the structural impact of instituting property management is both undesirable and costly for managements. It is in lieu with the cost and the personnel adjustments that they have to go through. Furthermore, companies like IKHP still have to conduct trainings and seminars to inculcate environmental preservation to personnel. This would lead to business interruptions translating to reduce profit.
Economic Overview. (2009). Hong Kong Property Market Annual Report: 2007-2008. Chesterton Petty Ltd.
Guilford, J.P. and B. Fruchter (1973), Fundamental Statistics in Psychology and Education, 5th Edition. New York: Mc Graw-Hill
Heritage Foundation (2009). 2009 Index of Economic Freedom. Retrieved October 15, 2009 from <http://www.heritage.org/research/features/index/countries.cfm>
Hong Kong Trade Development Council (2009). Hong Kong’s facility management services reach international standard. Retrieved October 15, 2009 from <http://infrastructure.tdctrade.com>
SARS Expert Committee (2005). SARS in Hong Kong: from experience to action. Report of the SARS Expert Committee. Retrieved October 15, 2009 from <http://www.sars-expertcom.gov.hk/english/reports/reports.html>
The Hong Kong Government Privatisation Challenge. (2004, March). Jones Lang Lasalle, Jones Lang LaSalle IP, Inc.
Tse, A. (1999, December 16). SHKP in new bid to boost management. Hong Kong Standard.