Will Australia become a Capital Exporter?; Mortgage holders have more cash than official figures recognise - money held in offset & redraw not accounted for by ABS
Tweet Topic Started: 6 Sep 2013, 08:49 AM (9,747 Views)
There is the very big possibility of sample error. Outliers can be very out.
Really these supposed "Facts" are guesses, probably good ones but still guesses.
Do you understand statistics theory and practice at all? Calling these stats "guesses" is naive. All you are talking about is what the confidence interval and possible error is, and you will find that with those sample sizes the error margin is likely quite small.
Remember, as interest rates fall, banks don't automatically reduce the minimum monthly payment,
I think this depends on your bank. Suncorp does automatically adjust minimum payments as interest rates rise and fall and the amount in cashback (redraw) changes. On the other hand, it seems that NAB does not make adjustments (at least not downward ones.)
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Do you understand statistics theory and practice at all? Calling these stats "guesses" is naive. All you are talking about is what the confidence interval and possible error is, and you will find that with those sample sizes the error margin is likely quite small.
Catweasel say sampling the error different to margin the error.
In mouse eyes, is 25 the margin error, big or the small?
Do you understand statistics theory and practice at all? Calling these stats "guesses" is naive. All you are talking about is what the confidence interval and possible error is, and you will find that with those sample sizes the error margin is likely quite small.
Actually, I do understand, it's not exactly naive to say they are 'guesses', maybe a bit simplistic. (especially for those who like to pull apart words)
I suppose I should have said estimate instead of guess. (estimating being a 'smart guess' or 'expert guess' based on data rather than whimsy)
But really, when we have upwards of 7 million homes and a sample of less than 10 thousand homes, there is high probability that outliers in the estimate are far outside the mean.
It's likely that Lef-tee is one of these outliers, the estimate is probably pretty good for the majority of the population, but it is still just an estimate.
Obviously, companies who do these surveys try very hard to reduce the margin of error, but there is always uncertainty, which is why words such as probable and likely are used rather than actual or is.
Until survey's actually count each and every part of the population in its scope, they are still estimates.
I hold census data to be factual (there are errors in this too, such as Frank) but any survey with a sample smaller than the total population should be taken only as a possible indicator.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Yes, a bit out of date... the latest indications are that around 65-90% of borrowers have been building buffers since 2011 (on top of the existing buffers already built by 50% of borrowers as per the earlier RBA report).
Based on what, exactly? "65-90%" is a laughably large spread for any authoritative datasource, so I suspect it is mere "handwaving by Shadow" instead.
But really, when we have upwards of 7 million homes and a sample of less than 10 thousand homes, there is high probability that outliers in the estimate are far outside the mean.
Back when I did a very little bit of sampling theory, the variance of a mean computed from a sample from a large population (or a sample from any population when sampling was with replacement) was the variance of the population divided by the size of the sample.
In other words, it makes almost no difference at all whether the population is 7 million or 7 billion, and if you are trying to compute the mean from a random sample from the population, then a sample size of 10,000 is (for most distributions of random variables) more than you need to have your expected error to be less than a couple of percent of your measured value. That is, if a sample of 10,000 tells me the mean value is 21 months, I'd be pretty damn confident that the actual mean lies between 20 and 22 months.
I'm not sure I buy the 8% number though. the derivation of that seems non-rigourous to me.
Also, "typical" and "mean" are two completely different things in my book.
Yet more also: One needs to be careful what conclusions one tried to draw. The size of the average mortgage buffer is very useful for, say, investigating the effects of household indebtedness as a percentage of GDP but it has almost no bearing on the amount of stress out there.
Increase the size of the average buffer and you will get an effective reduction in the (household debt)/GDP ratio, but it makes no difference to the fact that pretty-much 100% of FHBs go through a period when they have no buffer and repayments are a very solid whack out of their household disposable. i.e. the people who are stressed stay stressed.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Yet more also: One needs to be careful what conclusions one tried to draw. The size of the average mortgage buffer is very useful for, say, investigating the effects of household indebtedness as a percentage of GDP but it has almost no bearing on the amount of stress out there.
Exactly. This is one measure where mean or even median mortgage buffers don't give a truly material indication of potential stress on a Big 4 mortgage book: decile- or quintile-based measures would be far more useful, but seem not to be available from public sources.
And I don't consider myself a bear in saying so. I rather doubt there is much of a problem at the current combination of unemployment and mortgage interest rates. But I suspect that both of those metrics are close to their troughs, particularly as the potential bottom for the AUD (with corresponding RBA interest rate consequences) is yet to be truly explored.
Actually, I do understand, it's not exactly naive to say they are 'guesses', maybe a bit simplistic. (especially for those who like to pull apart words)
I suppose I should have said estimate instead of guess. (estimating being a 'smart guess' or 'expert guess' based on data rather than whimsy)
But really, when we have upwards of 7 million homes and a sample of less than 10 thousand homes, there is high probability that outliers in the estimate are far outside the mean.
It's likely that Lef-tee is one of these outliers, the estimate is probably pretty good for the majority of the population, but it is still just an estimate.
Obviously, companies who do these surveys try very hard to reduce the margin of error, but there is always uncertainty, which is why words such as probable and likely are used rather than actual or is.
Until survey's actually count each and every part of the population in its scope, they are still estimates.
I hold census data to be factual (there are errors in this too, such as Frank) but any survey with a sample smaller than the total population should be taken only as a possible indicator.
That is right estimates are the correct term. I assume that they have also estinated uncertainties - I will have a look at the HILDA methods when I get sometime. You will be surprised at how good an estimate you can get from what looks like a small sample. We test air and water with much smaller samples and find that the results are repeatable(reproducible) within 95% confidence intervals.
I have previously looked at unemployment which is also done by survey and they have quite surprisingly good estimations.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Yeah, I wasn't saying that they're are completely false, just that sometimes the statistics that are reported may not be correct for everyone.
Most people would fall within the survey's estimate, some people won't.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
MORE than 90 per cent of some lenders' mortgage customers have not reduced their repayments since 2011 when the RBA began the process of slashing the cash rate to the lowest level ever.
The Greater Building Society, one of the largest in the country, says that at least nine in 10 home loan customers haven't asked.
A spokesman for market no.1 CBA said 65 to 70 per cent of its variable-rate customers "have not reduced their repayments" since 2011.
all major banks will be similar to CBA, 65-70 percent with buffers
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