School zoning perpetuates inequalities in society

So says David Grimmond in his discussion of school zoning! (Infometrics link here)

I am not a fan of school zoning.  Its main outcome is to reduce school choices for poorer families.  Although the intentions underpinning the policy are probably noble, it has unintended consequences which on the whole harm the prospects of children from poorer households.

Zoning adds another incentive to move into a community filled with people that are “like” you.  As we know from Schelling, a small incentive for such things can quickly lead to complete segregation.  Rather than enforcing greater equality in the school system, zoning is a feel good policy that ends up reinforcing broader inequalities!

If we honesty want to ensure education provides for everyone in society, David suggests:

It is too simplistic to presume that alternatives to the public system will be sufficient to generate education improvements.  Indeed, the US experience demonstrates that there is a mix of outcomes from charter schools.  But what the US experience with charter schools has provided is the opportunity to learn from their experimentation.  My reading of this evidence is that there are at least three areas that schools can focus on to improve education outcomes:

  • Ensuring that the school maintains standards about expected student behaviour
  • Openly assessing, reviewing, and improving teaching methods
  • Directing better teachers towards students who have the greatest need for improved education outcomes.

Translating central bank speak

Am I the only one who spends a lot of time trying to translate RBNZ communication into English? Below is a quick take in 200 fewer words what I think the key messages are from the October OCR announcement:  Read more

Home ownership causing higher unemployment. Just how would we react?

Interesting article here on the ‘Oswald Hypothesis’ – a link between housing ownership and unemployment.

The basic argument seems to be if you live in a house your less likely to move to where jobs are because of the transaction costs associated with selling your house and moving from one community to another. So when you are made redundant – you opt for welfare rather than moving to another place.

This seems more plausible in the provinces than in cities. Read more

The folly of excluding GST when discussing tax

Over on Kiwiblog I saw the title “tax system has got more, not less, progressive“.  I thought that sounded interesting, but after looking at the post, and Bill English’s initial release, I realised that this was actually false.  Danyl from Dim Post was right when he notes: Read more

Breaking windows, doors, and GDP

This week Mieke Welvaert discussed (Infometrics link) the broken window fallacy.

GDP measures the value produced within a geographic entity.

Even though it seems damaging property could increase GDP, this is unlikely – and when it does, it does not do so in a way that increases wellbeing.  In truth, it would be better if we didn’t have to repair what we have and could just add to it.

Although this is not possible in the case of natural disasters, it is possible when we can prevent destructive events from happening.

The moral of the story is: If it ain’t broke, don’t break it.

 

Ministry advice on LVRs

It appears an OIA request has made government ministry advice relating to loan-to-value ratio limits on mortgages available.  The Herald article is here:

  1. Reserve Bank.
  2. Treasury.
  3. MBIE.

Linking is not approving. Read more