Critically analyse the potential effects of the United Kingdom leaving the EU
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November 4, 2022Critically analyse the potential effects of the United Kingdom leaving the EU
Critically analyse the potential effects of the United Kingdom leaving the EU on a specific sector of the construction industry.
Choosing just one sector of the construction industry, critically analyse the potential impacts on that sector of the UK’s exit from the EU. Use economic theories and current economic data to explain and illustrate your arguments.
Maximum 1000 words, excluding references.
Presentation of Preliminaries
Marking scheme
| Introduction | 10% |
| Outline and presentation of the data | 15% |
| Analysis of the data | 30% |
| Synergising of data with relevant economic theory | 30% |
| Supported conclusions | 10% |
| Presentation, referencing | 5% |
Construction Economics Summative Assignment 1
By Aivaras Symanas
Introduction
United Kingdom (UK) decision to withdrawn the membership of the European Union (EU) will shape the future of the country’s relationship with its largest trade partner – the EU. This assignment will examine various positives and negatives effects that Brexit might have on residential construction sector in relation to economic theories, it will also review latest data, statistics and key arguments from various construction bodies and journals as well as other sources.
Uncertainty
Uncertainty resulting from Britain’s vote to leave EU will potentially have an impact on house price growth and housing transactions with implications for existing and aspiring homeowners. It will take some time for the extent of those impacts to become clear and much depends on how economic uncertainty affect sentiment, particularly in the short term. Within days of the referendum, the share prices of housebuilders and leading estate agencies reportedly fell down. London estate agent Foxtons issued a profits warning and some high-profile developments were put into question. (Garrett, 2016).
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In a world of uncertainty, prospect theory aims to explain how people make choices between different options or prospects, it focuses to describe, explain, and predict the choices that the typical person make. Prospect theory tells us that as long as prospects are in the positive domain, the certainty effect leads to a risk-averse preference for a sure gain, rather than one which may be larger but be merely probable. However, once prospects are in the negative domain, people exhibit risk-loving preferences for larger losses which are probable, rather than smaller certain ones. (Kahneman & Tversky, 1979)
