Matt Nolan

Greens carbon tax

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I see that the Greens have announced a carbon tax to replace the emissions trading scheme (with details and analysis by BERL here).  The authors of TVHE have long been a fan of  this type of switch when discussing the issue (eg here and here).  And the idea of pricing an externality and using it to lower other tax burdens is a good one.  Note:  John Small also discusses here, with specific discussion about dairy.  Aaron Schiff discusses here.

So it should be unsurprising that I broadly agree with the aim Green party policy here, and this should be kept in mind while reading my post.

However, TVHE isn’t about saying what policies I think are good or bad – it is about considering trade-offs and thinking about the details of policy when we can.  In that context, there are a few points I must raise.

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Matt Nolan

The rhetoric of restricting the choice of the poor

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Via Gareth Morgan on twitter I spotted the following post from the University of Otago Public Health blog.

The money quote:

They found that the biggest impact of a minimum price policy was on “harmful” drinkers in the lowest income quintile (7.6% reduction in alcohol), whereas the impact on harmful drinkers in the highest income quintile was modest (1%). Consumption fell by 1.6% among “responsible” drinkers in the lowest income quintile. That is, the impact is concentrated among low-income harmful drinkers.

Moreover, this Lancet paper found that “Individuals in the lowest socioeconomic group (living in routine or manual worker households and comprising 41·7% of the sample population) would accrue 81·8% of reductions in premature deaths and 87·1% of gains in terms of quality-adjusted life-years.” In the public health field, we seldom see policy packages that have such a notable impact on reducing health inequalities. [** Further comment at end].

The gains come from putting a minimum price of alcohol that prices the poor out from consumption.  Consumption that has a benefit – something that is ignored constantly.

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Matt Nolan

New Zealand’s labour market recovery in ‘ONE CHART’

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I hate one chart posts.  No that was too weak, I despise single chart posts.  But given that I am under the thumb of greater forces than myself (my thesis, my job) I have decided to do one.

So what is this chart that tells us about the NZ labour market recovery?  It is actually a chart neatly provided by Statistics New Zealand in their release of the labour market data:

Cheers Statistics New Zealand! (Note, initially the wrong graph had shown up, unemployment – it should be employment rates)

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Matt Nolan

Inward migration: A story of no-one wanting to leave

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I endorse this post by Aaron Schiff – go read it.

You will also notice in the above chart that over the past ten years the number of arrivals has been relatively steady with a slight upwards trend, while departures is more volatile. Thus temporary spikes in net migration seem to be caused more often by changes in the number of people leaving rather than arriving, although the recent spike has been caused by both sides of the equation.

Something I would note here is that, until recently, this has been largely a story of New Zealander’s coming home as well.  Finally:

We should celebrate because on the incoming side, skilled immigrants provide New Zealand with a significant free gift. Some other country has paid the cost of their birth, childcare, childhood medical care, education, etc. They turn up in New Zealand effectively bringing all that investment with them and this benefits the country. Sounds good to me.

Something I would note here – it is a strange contradiction complaining about a brain drain while bemoaning skilled migrants moving here.

Deep down we should be a little bit more careful thinking about both issues.  People are moving as they see it as being in the long-run interest of their family and their lives – in that way, why is it so hard for us to accept that NZer’s may want to spend some time overseas, and that non-NZ citizens may want to join our community?

Matt Nolan

Global corporations, price discrimination, and NZ

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I see that there is a new paper out discussing the fact that both tradable and non-tradable prices in New Zealand are “high” relative to what people are paying around the rest of the world.  I am used to the argument about non-tradable prices being high RELATIVE to tradable prices, but the tradable price argument is a bit of a fun twist on it all.

Eric Crampton has summarised the results, and Patrick Nolan from the Productivity Commission has had a chat about it.  Update: Donal has a couple of posts here and here.

My intention was to argue with them, especially Patrick as he is my brother.  But everything they wrote, and what I’ve read of the paper, was entirely reasonable – so I’d suggest reading those yourself 😉

Instead I will “add value” by making an unsubstantiated claim that may ad hocly explain this from the paper:

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Matt Nolan

Beware the seductive simplicity of the Spirit Level

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I see that the Spirit Level authors are in town, and as a result there was a recent Herald article took aim at income inequality in New Zealand, relying strongly on the book ‘The Spirit Level’.  A conversation about the inequalities society believes are fair, or at least justifiable, is a good thing.  However, the Spirit Level’s claims that simply targeting measures like the Gini coefficient will make everyone better off is a misleading, and dangerous, place to start this conversation.

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