OnPoint by Keith Ng

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OnPoint: Media beat-off

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  • Graeme Edgeler,

    That's tonne.

    You need a sub :-)

    Wellington, New Zealand • Since Nov 2006 • 2996 posts Report Reply

  • Craig Ranapia,

    These "average families" are statistical constructs. When independent data is introduced, the number they arrive at is not a measurement of anything in the real world – it's just a comparison of two different statistics. It is arbitrary, and can't be talked about as if it was real.

    And would it be overly-cynical to say that we're going to get a lot more 'constructs' thrown at us as election year grinds on?

    North Shore, Auckland • Since Nov 2006 • 11877 posts Report Reply

  • David Haywood,

    Thanks or putting your back-catalogue up on PA, Keith. I've just been enjoying a pleasant read back through them all -- lovely work, by the way...

    Dunsandel • Since Nov 2006 • 973 posts Report Reply

  • Don Christie,

    Yeah, and wot poneke said.

    Wellington • Since Nov 2006 • 1615 posts Report Reply

  • Shep Cheyenne,

    So Dawkins attributes meme to hmself, well who else would he attribute it to?

    I preffer my own interpretation of meme as the transliteration of the maori mimi.

    It works with added inflection.

    Since Oct 2007 • 927 posts Report Reply

  • Craig Ranapia,

    Yeah, and wot poneke said.

    Meh... Poneke makes some good points, but I think writing "Good news doesn’t sell" misses the point -- I don't want to open my morning newspaper, or turn on Morning Report, and have my intelligence insulted by media Pollyannas either. Here's a really radical notion: How about more people follow Keith's example, and assume we peasants can actually be trusted to think (and feel) for ourselves, without being manipulated by the statistical equivalent of Judy Bailey's tear ducts?

    North Shore, Auckland • Since Nov 2006 • 11877 posts Report Reply

  • Rich of Observationz,

    I thought the word "meme" was invented by ultra-pretentious American dud-prediction comic Wired and disliked it accordingly.

    Also the metric tonne is within 2% of the imperial ton - so there pretty much interchangeable for the purpose of discourse.

    Back in Wellington • Since Nov 2006 • 4424 posts Report Reply

  • Christopher Worthington,

    Hickey's defence was that there aren't income numbers more accurate that the HES, and that it was probably a reasonable estimate.

    I'm not sure about this. The income growth estimate that comes out of the HES is very low - 3.2%pa. Average wage growth from the Quarterly Employment Survey was 4.1%pa over the same period, and as the employment rate climbed over this period the average household wage income would have been increasing at a faster rate. The NZ Income Survey, which runs yearly, puts average household income growth at 6.3%pa over this period - the "typical" household (couple 2 children) had income growth of 7.3%pa. However both the HES and Income Survey are biased because they include benefits but not taxes, so Working for Families raised the average.

    Although these are all official statistics the HES strikes me as the odd one out in terms of result; it's based on just two sample periods; and the survey was redesigned between sample periods.

    Keith's main point is correct: on average, weekly household expenditure on mortgages was $81.40 in 03/04 (average rental expenditure was $58) - far below Hickey's assumed average mortgage of $225/week.

    As a large portion of mortgage payments are savings it is quite misleading to talk about rising mortgages pushing families "into the red"; likewise, some of the interest component is a transfer between NZ households so, on average, immaterial.

    Since Jan 2008 • 25 posts Report Reply

  • Rich of Observationz,

    they're

    Back in Wellington • Since Nov 2006 • 4424 posts Report Reply

  • Andrew Paul Wood,

    Here's a really radical notion: How about more people follow Keith's example, and assume we peasants can actually be trusted to think (and feel) for ourselves, without being manipulated by the statistical equivalent of Judy Bailey's tear ducts?

    Sorry, still laughing. You are hardly one of the peasants Craig. There is a large group out there who are motivated entirely by knee-jerk reactions and immediate gratification who would quite happily tolerate some pretty horrible things happening to other people in return for a flat screen and Sky who probably need a bit of encouragement.

    Christchurch • Since Jan 2007 • 175 posts Report Reply

  • Angus Robertson,

    The upshot is that, before we start going on about food prices, GST and so on, let's keep our eye on the ball here: Housing cost is the biggest and has risen the fastest.So let's talk about interest rates, not bloody cheese.

    How? Seems impossible.

    There are 2 big factors for interest rates - global credit restrictions on the world market and Official Cash Rate (OCR) of the Reserve Bank.

    The OCR has risen from 5.25% (March 2004) to 8.25% (March 2008). The OCR is set to meet an inflation target band, excessive inflation drives increases. The band is defined by government policy.

    Auckland • Since May 2007 • 984 posts Report Reply

  • Andrew Paul Wood,

    Agrred. Playing Jenga with GST isn't going to help anything except make filing tax returns considerably more complicated.

    Christchurch • Since Jan 2007 • 175 posts Report Reply

  • Paul Campbell,

    I'm old enough to have seen more than one housing boom/bust cycle - in my experience things tend to eventually come right by themselves - in my early 20s I bought s cottage by the beach for $8,500 - saved like crazy for a year and paid off the mortgage then sold it when I went on my OE - in my late 20s in the US (at the end of a boom) I despaired at the thought of buying a house, yet scrimped and eventually bought one - the value went down for a while then back up.

    What I'm trying to say is that these things come and go and are to some extent self correcting - that's what the bust part of a boom-bust cycle is for - the problem of course is that in these sorts of markets that run on hype people get in without really understanding what's going on and get burned.

    Personally I blame in part the preponderance of "house porn" on TV - those shows where people buy houses, do a quick pain-over-the-cracks and sell them for lots more - they wouldn't make good TV if people didn't usually make a bunch of money - I want to see at least some of the people going through a bankruptcy at the end

    Dunedin • Since Nov 2006 • 2074 posts Report Reply

  • Kyle Matthews,

    Keith's main point is correct: on average, weekly household expenditure on mortgages was $81.40 in 03/04 (average rental expenditure was $58) - far below Hickey's assumed average mortgage of $225/week.

    Those figures can't be right. $81/week on a mortgage must be... $60 - 70K mortgage or so at lower (03/04) interest rates. Seems like a very low mortgage to take out on a house in most parts of the country.

    But $58/week rental expenditure for a household? That wouldn't rent you a room in most places in NZ in 03/04, let alone an actual house.

    Since Nov 2006 • 6162 posts Report Reply

  • Craig Ranapia,

    Sorry, still laughing. You are hardly one of the peasants Craig.

    I'm just another arsehole trying to get through the day with ten fingers and ten toes intact. Stating the bleeding obvious, can anyone made good judgements off bad or partial data? Don't think so.

    North Shore, Auckland • Since Nov 2006 • 11877 posts Report Reply

  • Robyn Gallagher,

    **Shep Cheyenne:** So Dawkins attributes meme to hmself, well who else would he attribute it to?

    Rich of Observationz: I thought the word "meme" was invented by ultra-pretentious American dud-prediction comic Wired anddisliked it accordingly.

    You know who can settle this? Yeah, it's the Oxford English Dictionary. OED reprazent. This is the earliest mention of meme that the OED has found:

    **1976** R. DAWKINS Selfish Gene xi. 206 The new soup is the soup of human culture. We need a name for the new replicator, a noun which conveys the idea of a unit of cultural transmission, or a unit of imitation. ‘Mimeme’ comes from a suitable Greek root, but I want a monosyllable that sounds a bit like ‘gene’. I hope my classicist friends will forgive me if I abbreviate mimeme to meme... It should be pronounced to rhyme with ‘cream’. Examples of memes are tunes, ideas, catch-phrases, clothes fashions, ways of making pots or of building arches.

    Raglan • Since Nov 2006 • 1851 posts Report Reply

  • Keith Ng,

    And would it be overly-cynical to say that we're going to get a lot more 'constructs' thrown at us as election year grinds on?

    Statistical constructs aren't useless, they just need to be handled with care. There are only certain types of conclusions that you can draw out of certain types of data, and if you don't know the limitations, *then* it becomes a problem.

    Auckland • Since Nov 2006 • 530 posts Report Reply

  • Christopher Worthington,

    Both measures are averages Kyle, so you could say that the average household expenditure on shelter was rent+mortgage=$139/week. This might seem low but remember 37% of households live rent or mortgage free.

    Since Jan 2008 • 25 posts Report Reply

  • Keith Ng,

    Christopher - excellent points. Any advice on when it is more useful to use QES or Income Survey data? I was quite reactive in looking at HES data (i.e. because Hickey did), but if you were doing it from scratch, given the need to take into account food/petrol prices, what would you use?

    Auckland • Since Nov 2006 • 530 posts Report Reply

  • Keith Ng,

    How? Seems impossible.

    The OCR has risen from 5.25% (March 2004) to 8.25% (March 2008). The OCR is set to meet an inflation target band, excessive inflation drives increases. The band is defined by government policy.

    Reducing inflationary pressures by reducing government spending - i.e. running a surplus? 8-)

    It's an interesting one that I'm trying to tackle. Bill English has been going on about how the reason we have high interest rates is because of high government spending. Tax cut is *less* inflationary than direct government spending, but not spending is even less inflationary than tax cuts. My back-of-the-napkin guess is that 1% decrease in interest rates will be worth as much for Hickey's "average family" as a 2% across-the-board tax cut.

    These are more doodles than calculations, though, so if anyone has more thoughtful analysis, I'd love to hear it.

    Auckland • Since Nov 2006 • 530 posts Report Reply

  • Kyle Matthews,

    Both measures are averages Kyle, so you could say that the average household expenditure on shelter was rent+mortgage=$139/week. This might seem low but remember 37% of households live rent or mortgage free.

    Well that makes it an incredibly useless statistic then.

    The majority of people who don't pay rent, own their homes. They're in the mortgage column. You can't say that average rent is only $58/week, because two-thirds of the people pay no rent, because they pay a mortgage. And vice versa.

    That's saying "the average rent paid by everyone in the country, including those people who don't pay any at all, is $XX". What good is that?

    Since Nov 2006 • 6162 posts Report Reply

  • Angus Robertson,

    Those figures can't be right.

    The beauty of statistics means the figures might well be right, irrelevent, but right.

    The average weekly household expenditure on a mortgage could be read as the cost of all mortgages divided by the total number of households, same with rents. That would include all households, irrespective of if they actually are mortgaged, rented or freehold. A very big denominator means a unrealistically small figure compared to the average mortgage, which is the average of all households that actually have a mortgage.

    It is like comparing chalk to that-which-cannot-be-named.

    Auckland • Since May 2007 • 984 posts Report Reply

  • Angus Robertson,

    Damn it. Work got between starting to write comment and posting. What Kyle said: "What good is that?"

    Auckland • Since May 2007 • 984 posts Report Reply

  • Angus Robertson,

    Reducing inflationary pressures by reducing government spending - i.e. running a surplus? 8-)

    Except that a "credit crunch" ala America is reproduceable here. 8-(

    Inflation is partly driven by international factors (oil peaking - Chinese labour costs) and if sufficient these maintain inflation higher than 3% band. If so then that government action (reducing spending, running a surplus and not reducing taxation) will not reduce inflation below 3% and the mortgaged get hit by all negatives (high inflation, less government investment in economy, high taxes, high mortgage rates) which severely restricts their ability to repay the mortgage. If they do not repay their mortgage and the bank is left holding a bad debt for a negatively geared property - which (if a lot of these occur) makes it more difficult for our banks to borrow money on the international market, so they have to charge higher interest rates.

    Perhaps it would be better to increase the band of acceptable inflation?

    Auckland • Since May 2007 • 984 posts Report Reply

  • Christopher Worthington,

    Kyle, I'm sorry but that's how the results in the household expenditure survey are reported, and we were talking about the average household in terms of income, so average shelter expenses would be the relevant comparator.

    Broken down by tenure of dwelling, households that own their property with mortgages (32% of the the total) spent an average of $247/week on mortgage payments in 2003/04; they also had an average income of $80,700 (versus an average of $50,700 for all other households).

    Keith, the QES is the most timely measure (and a longer time-series is available) but you don't get any measure of incomes from self-employment, investments or benefits, so for most things the Income Survey is probably the better bet - especially as it breaks the numbers down by household type. As I said before though, the IS is biased in the way it treats government transfers.

    Since Jan 2008 • 25 posts Report Reply

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