Shamubeel Eaqub

Macro data and are we doing better?

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Statistics New Zealand launched their social indicators on 26 November 2013. It is a collection of data from the General Social Survey, which supplements various ‘hard’ economic data with ‘softer’ measures of perceptions.

I was part of a panel that spoke briefly at the launch. Donal at Economics New Zealand has written about it already.

The question posed to me was: Are we doing better? It’s a loaded question. It depends on who you ask and what dimension you measure.

Putting it in the context of the economic cycle, we can describe a recession where economic activity, employment and various other indicators fell. They have subsequently recovered. But the recession and the recovery were shared unevenly, across regions, industries, age, ethnicity etc: Read more

Matt Nolan

NZ inequality statistics: Some of the research

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Donal over at Economics New Zealand posted up some OECD figures that indicate that the Gini coefficient over the OECD was the same in 2010 as it was in the mid-1990s, and that it is actually lower in New Zealand.

As I have noted earlier, I am going to start writing about inequality on the blog.  So I have been spending a little bit of time reading about it!

Given this, I’ve realised we can take this analysis a step further.  Bryan Perry from MSD discussed the Gini coefficient, and other indicators, in his introduction for the inequality conference in July.  I wasn’t there – but I know the document is here, and I know Figure D.17 (third page of the pdf) has a graph of the Gini coefficient through time, and a trend line through it.

A couple of things should stand out when we look at this:

  1. The Gini coefficient has more been “flat” rather than “falling” since the mid-1990s if we look at the trend – the drop the OECD recorded looks like it may have been from comparing direct points, which are volatile
  2. When people complain about the large increase in the Gini coefficient they are not talking about the mid-1990s to today – they are talking about the reform period.  This figure shows that there was a very sharp increase in the Gini coefficient between about 1987 and 1992.

So unlike other countries, the complaints are NOT about a creeping increase in inequality through time – but about the level shift in inequality that New Zealand experienced following the reforms.  Ultimately, there is a view by these groups that the “equity-efficiency trade-off” New Zealand decided to make at that point wasn’t the right or just one.

Now I am not sure how we are even supposed to evaluate that claim without thinking about why, and how, inequality has changed.  To give some flavour for this, I’ll comment on a few of the New Zealand specific research papers we have had about this change – if you know any other similar work, flick me a line in the comments 😉

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Matt Nolan

A bunch of interesting links

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All links via Marginal Revolution – all things I want to comment on, but do not have the time.  View this as a sort of saving space!

Matt Nolan

Value and Doctor Who

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Today is Doctor Who’s 50th anniversary.  Seeing that I wanted to do an “economics of Dr Who” post … but how do I do that?  All the Time Lords are dead, and the other people involved are either human or weird aliens that are in conflict in some way.  There isn’t really much of an economy to discuss here.

However, there is one point.  The idea of “value” for an individual when material scarcity has ebbed away.  The TARDIS can make whatever things the Doctor wants, so he is hardly in material need – or even suffering from a material want he can’t satisfy.  In that case, what is going on?  Well this video gives us a hint.

http://www.youtube.com/watch?v=UeJ4Ak2xCkw&t=1m25s

He can go anywhere in time and space, create any material goods he wants, and as a result at his current age he is fully satiated – he gets no real additional satisfaction from any of it.  As a result, he finds other people who find wonder in it and lives through them – his relationships with others become an important part of how he finds value, and defines his purpose and character.

If material scarcity heads away, the things individuals find value in will change.  In such an environment policies that “target” things without a recognition of this change – no matter how well intended – will be poor policies.

 

Matt Nolan

Some ‘inequality’ is good and other unpopular statements

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We have an attitude as individuals to define things as “inherently good” or “inherently bad”.  And when this comes to policy indicators this is dangerous.

Shamubeel has already discussed this when thinking about the broad idea of equality, and so has Sen – although those posts were just us quoting him!  However, a lot of recent discussions have been specifically on a more narrow measure, that of measures of static income inequality [think Gini coefficient, inter-quartile range, 80-20 income range, etc].  We are being told these are inherent bads which must be squashed!  But does this make sense?  Or is some inequality in these measures really a good thing?

Note:  I read this post after writing my post.  It is very good.

Bah, inequality is bad – it’s obvious

Yes, yes, the most common response I get – but you’re here now, so lets have a think about what we are doing. Read more

Matt Nolan

Politics aside: National, coalition partners, and the environment

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I know nothing about politics, and try not to blog about it – in fact, I hope to not post on it again.  So please don’t be too mean to me 🙂

But I also like to write blog posts, and find the entire idea of getting the Conservative Party into parliament as a coalition partner for National to be weird.  Especially after this “Ask Colin Craig” event on NBR.

Now sure, there could be room in parliament for a socially conservative/religious party, that is all well and good.  And given the current make-up of the National party it would likely lean towards National – but with the Conservative Party’s willingness to be economically interventionist, they also have more in common with where Labour and the NZ Greens are going.

With ACT burnt up, the Conservative party, and calls for a new version of ACT seem to be the only ideas flying around about future coalition partners for National.

But why can’t we have an economically centrist Green party?

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