Matt Nolan

Mismeasurement and income inequality

/in /by

Update:  Anyone that is waiting for this, I’m sorry but I am massively swamped with work.  I will do this – I need to look at this for other work of my own – however, a post may not appear until mid-March.

Just as a pointer, I see that there were some measurement errors in the income data used by Treasury, Stats NZ, and MSD.  That implies that some of the work mentioned at the start of this post (the recent stuff, not the longer term research papers) will be off. (ht Rates Blog).  MSD goes through matters here, I will read through what they said on the weekend.

Given how much discussion there is about these issues at the moment, this is a touchy subject – understandably.  A couple of points I’ll make are that:

  1. Given how careful these departments are, this will be upsetting for them.  I respect the fact they’ve owned up and not made any excuses.  Maybe it is my recent dealings with Vodafone, where they just kept blaming other people for the fact I have to repeatedly cancel an order I made six weeks ago, but it is nice to see organisations owning up and not making any excuses.
  2. It is important we all try to figure out what these error mean for our understanding of the issues, and policy trade-offs.

I will try to have a post up discussing what is going on next week – and what it means for some of the things I have discussed on the blog over the past year.

Matt Nolan

Bleg: Nearing time to restart contributions to the “Cullen Fund”?

/1 Comment/in /by

I’m current reading a paper discussing the different ways of measuring Gini mean difference (a statistical measure which you in turn use to get the Gini coefficient) and writing summary articles on HES expenditure, NIIP (including post-2009 revisions) in NZ and Aussie, and expenditure GDP factor shares for clients.  As a result, I’m not brimming with insightful commentary, although I am having fun.

However, there is a question I’d love to hear your views on.  Should we be restarting contributions to the “Cullen Fund” pretty soon?  Here are some reasons that may support it:

  1. We are nearing surplus/concerns about the government fiscal position are less significant.
  2. We are experiencing a high high terms of trade.  In some ways, the boost in prices for dairy products could be seen as a natural resource “boom”.  In that case, could the Cullen Fund be seen as an appropriate sovereign wealth fund?
  3. The Cullen Fund was put in place because of concerns about the affordability of universal superannuation, these concerns still exist and if we are completely unwilling to increase the retirement age …

I do not have a comprehensively thought out view on this, I haven’t look at relevant data and fiscal accounts are my area of interest.  Hence why I thought I’d ask some of you fine people who have no doubt put more consideration into these issues 😉

Matt Nolan

Discussion Tuesday

/in /by

An easy one for today … 😛

Economics and free will are incompatible

Once again, remember that these are points for discussion – I am not saying I agree or disagree with them.

Shamubeel Eaqub

Aussie: home away from home?

/11 Comments/in , /by

Matt and I got talking about immigration off an earlier blog. He asked:

“Could it be that Brisbane feels more at like home for people from the rural North Island and South Auckland than Southland or Auckland City do?”

It got me thinking about why people migrate. Read more

Matt Nolan

Countdown and wholesalers: Are consumers the ones benefiting?

/25 Comments/in , /by

There has been a bit of discussion about Countdown hurting wholesalers to get prices down, flexing their muscle shall we say (here and here).  The Commerce Commission is concerned about this and is investigating.

Via Twitter I noticed that the concerns about supermarkets being bullies has led to an increasing desire to do something about supermarkets in general in our papers.

Now having a government run supermarket enter and then arbitrarily mess around with the price and availability of goods and services “for our own good” makes me throw up in my mouth a little – honestly the anti-obesity rhetoric thrown in the piece is beside the point, and shows how a desire to “do something” can be taken too far.  Note:  A lot of the suggested policies such as “removing GST” or “adding vouchers” exist without randomly owning a supermarket, the point should be actually asking if they are a good idea in the first place – a point that seems to escape our columnist, unless she believes the analysis is well covered off by merely going ‘obesity is bad man’.

But there is a broader point here. Read more

Infometrics

Bright days ahead for New Zealand retailers?

/4 Comments/in /by

With Monday’s Retail Trade Survey posting a strong but patchy result (Note:  Infometrics clients can get our view on it here), it is a good time to ask – what does the future hold in the retail sector.  Gareth Kiernan recently had a peek into this issue and wrote up his thoughts for retail news (Infometrics link):

Overcapacity in the retail sector following the boom years up until 2007 meant there were not enough customers to go around once the economy hit the wall.  The increasing prevalence of online shopping, particularly with overseas-based retailers given the high exchange rate, further eroded the market share of local firms.  According to the NZIER’s Quarterly Survey of Business Opinion (QSBO), the profitability of merchants at the end of 2008 was squeezed harder than at any time since 1983.

The good news is that 2014 could be the best year for retailers for some time.