Surveys - lighting a candle in the dark

The man on the street is becoming more familiar with surveys based on statistical analysis and these are slowly gaining credibility, particularly if the information originates from a trusted source. This acquired credibility flies in the face of critics who sarcastically belittle the value of scientific data, dismissing it as lies, damn lies and statistics.

PKF is currently working on a number of sectors including topics concerning social affairs, direct taxation, social housing and the business sector in general. Let us start discussing social issues, in particular the recent phenomena of irregular migrants. Here one appreciates that civil war, political and economic persecution and poor living conditions could be some of the reasons why hundreds of irregular immigrants are visiting our shores.

This is a major issue currently affecting our islands so PKF Malta decided to design and execute an innovative statistical study to help gauge and analyse the perception of the Maltese society towards these asylum seekers (henceforth referred to as immigrants). Experts designed a questionnaire with a major focus on the overarching influence of the media and the main reasons why refugees flee their home country, finally assessing the level of acceptance (if any) by society and measuring the value of their contribution towards the economy.

When defining the ‘media’, it helps to quote Malcolm X, an African-American Muslim minister and a human rights activist who described it as “The most powerful entity on Earth. The media has the power to make the innocent guilty and the guilty innocent, and that is powerful because it controls the minds of the masses”. 

Our study aims to highlight the contribution that immigrants can give and discover whether the authorities are creating opportunities for immigrants to maximize their potential. Our pilot study, when completed, will show the percentage of respondents who believe that immigrants can be a useful human resource. An interesting fact that must not go unnoticed is that through their contribution, immigrants are creating competition among job seekers hence improving the competitiveness of our economy.

All the questions within our study were designed in such a way as to explore existent relationships and address other sociological issues. A scientific sample involves interviewing about 500 Maltese residents and aims to achieve a confidence level of 95% with a margin of error of 4.38%. Respondents are randomly selected from all the districts in Malta, composed of different age groups and gender.

Initially, the study aimed to interview immigrants residing in open centres and in private residences, however due to logistical complications, it was agreed that it’s best to focus in the interim on the perception by locals until the authorities decide to issue the necessary permits to approach immigrants. The aim of this ambitious study is to help in eliminating any deeply rooted misconceptions in the anthropological field while at the same time having educational attributes.

PKF is running another study in parallel to measure the multiplier effect gained by the hospitality industry if VAT on accommodation is reduced. In 2011, the VAT on accommodation increased from 5% to 7%, a measure that yielded extra revenue that however received negative backlash from MHRA, the hotels and restaurants association.

With the assistance of experts in the field of statistical modeling, PKF developed a study consisting of based modeling of data and analysis of empirical data collected through a one-on-one survey with a random selection of hotels. A statistically sound regression model was formulated to fit the data up to 2012 for prediction purposes.

These forecasts were then used to compare the Gross Value Added (GVA) of hotels of different classifications and respective revenue based on two rates of 5% and 7%. It resulted that the diminution in revenue was much less when compared with the gain earned by hotels (and the economy in general) through improved GVA, given that the VAT rate reverted to its original 5% rate. This intensive study is currently undergoing updates so as to reflect the latest 2013 figures. 

The final part of this study involved the design of a questionnaire, distributed to 32 hotels of different classifications, to calculate how negatively the increase in VAT rate affected marketing of bed nights. Quoting the first study, it is surprising to note how the majority of hotel owners replied that if authorities can be persuaded to decrease VAT, they would not reduce room rates but with the extra revenue be able to update facilities, create jobs and attract more tourists through amenities of a higher quality.

Another topic, which is interesting and needs further study, is the problem of social housing in Malta. For those who are unfamiliar with the term, social housing is a term used in the promotion of housing tenements for rent or for sale either by the state, non-profit-making organizations, or a combination of the two, usually with the end goal of facilitating access to affordable housing in the lower-income earning demographic of a given population.

Effective solutions to solve or mitigate housing programs are not a novel concept exclusive to Malta and we can see many examples around the world. In Europe, one can highlight the case of the Netherlands where in many cities such as Amsterdam, The Hague, Rotterdam and Utrecht, social housing is a statistic that approaches or even exceeds 50%. These types of habitats are known there as ‘huurwoningen sociale’, literally translated ‘social rental housing’.

Another successful example in Europe is Catalonia in Spain. Here there is a program for the housing rights of 2009-2012, in which the public housing policy and promotion of the rehabilitation of buildings is encouraged.

The opposition leader in the UK, Ed Miliband wants to reach his ambitious target of 200,000 homes by inducing a major expansion of council housing once elected to government. His party has promised to "simplify rules surrounding the Housing Revenue Account to give local authorities more flexibility in how existing public funding is spent". It is good to read that the Chartered Institute of Housing estimates that raising the caps by £7bn could enable the construction of 60,000 homes over the next five years, creating 23,500 jobs and adding £5.6bn to the British economy. Is the opposition leader in UK trying to copy the example of France, where their owners construct more than half of new homes?

 Miliband will call for a "self-build" revolution to reduce the dominance of the big four developers and to help expand supply in areas where there are most shortages. Crossing continents, we can also highlight the success had by social housing programs in the case of Minha Casa Minha Vida in Brazil. This program offers various facilities such as discounts, bank loans, allowances as well as reductions in the value of mortgage insurance.

Through these incentives lower-income families are given the possibility to become homeowners, a status desired by most. Despite the program not having been without its own share of corruption, which saw scandals permeate the program, the venture has been a megalithic success with upwards of 1.4 million homes having been built. The Minha Casa Minha Vida program aims to complete the second phase, 2 million houses and apartments, by 2014.

The programme is for families who have a gross income of up to R$ 5,000.00 (1517.90 €). The program offers facilities such as discounts, allowances and reduction in the value of mortgage insurance. If the family has a gross income greater than R $ 5,000.00, they can buy property financed and even use their FGTS, but not participate in the Minha Casa Minha Vida.

The result was more income available for workers and such development in Brazil is slowly eradicating the "favelas" or slum areas. The family income is calculated by taking the sum of the gross income shown informally or, formally, of all persons in a family and if approved, a bank loan is awarded guaranteed by the government at heavily subsidized rates. Observers agree that the existing social unrest, due to unaffordable housing in Brasil, can be mitigated as the lower classes will benefit from subsidies and special rates giving families help to purchase their first property.

True to the socialist creed, the present government is preaching that every citizen has the right to have his own house, so it is making available ready-built properties of modest size. Enjoying full amenities constructed in rural areas, the Minha Casa Minha Vida Scheme has now financed hundreds of properties. PKF will continue to invest time and resources to improve services to its clients as it aims to continue to publish empirical studies free of charge to authorities.

Lynsey Schembri is a senior statistician with PKF.

[email protected]