bluuebunny/crossref_metadata_2025 huggingface dataset:
What's the Beef with House Prices? Economic Shocks and Local Housing Markets
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Aitken Andrew
Published: April 2018

We examine the impact of shocks on community outcomes. The shocks that we examine are exogenous economic shocks which occur externally to the local community, and which are hypothesised to impact on the community. By testing the impact of these shocks on community developments, we enrich understanding of what causes communities to develop as they do over time. In particular, we gain a greater understanding of the impact of factors largely or wholly outside the control of local communities which lead to inequality in outcomes between communities. To focus our analysis, we concentrate on the price of houses within each community as the community outcome variable. The local price of houses summarises, in one dimension, a host of tangible and intangible components relating to the community of interest. We use a multivariate panel structure to estimate the long-run and short-run impacts of price, production and demographic variables on real house prices.
Bi-Directions Impacts of Economic, Social and Environmental Changes and the New Zealand Housing Market
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Kerr Suzi , Aitken Andrew
Published: April 2018

This report was prepared for the Centre for Housing Research Aotearoa New Zealand (CHRANZ). The aim of this study is to identify a set of housing research projects addressing two related topics. First, the impact of economic, social and environmental changes on housing in New Zealand's non-metropolitan regions; and second, the economic, social and environmental impacts of the New Zealand housing market. Identification of these projects is designed to help CHRANZ in developing and prioritising its research agenda pertaining to policy-relevant housing research within New Zealand. By doing so, we aim to outline coherent programmes of research that develop a comprehensive body of knowledge about the housing sector and its interactions with other key elements of society. The study suggests a set of research questions leading to coherent programmes of research, rather than to answer the research questions. We concentrate on posing questions that are of policy concern. Some are matters of current official policy concern. Others relate to issues that non-official sources consider should be of policy concern or which we judge may become of official concern in future years. Thus our analysis is informed by current policy priorities, but seeks to take a strategic look also at forthcoming priorities that may emerge over the next five years.
Regional business cycles in New Zealand: Do they exist? What might drive them?
Authors:   Motu Economic and Public Policy Research, Hall Viv , McDermott John
Published: April 2018

We use National Bank of New Zealand Regional Economic Activity data, to identify and characterise classical business cycle turning points, for New Zealand's 14 regions and aggregate New Zealand activity. Using Concordance statistic measures, logistic model and GMM estimation methods, meaningful regional business cycles have been identified and a number of significant associations established. All regions exhibit cyclical asymmetry for both durations and amplitudes, and synchronisations between aggregate NZ activity and each region are contemporaneous. The regional cycles rarely die of old age but are terminated by particular events. The regions most highly synchronised with the NZ activity cycle are Auckland, Canterbury, and Nelson-Marlborough; those least so are Gisborne and Southland. Noticeably strong co-movements are evident for certain regions. Geographical proximity matters, and unusually dry conditions can be associated with cyclical downturns in certain regions. There is no discernable evidence of association with net immigration movements, and no significant evidence of regional cycle movements being associated with real national house price cycles. The agriculture-based nature of the New Zealand economy is highlighted by the strong influence of external economic shocks on rural economic performance. In particular, there is considerable evidence of certain regional cycles being associated with movements in New Zealand's aggregate terms of trade, real prices of milksolids, real dairy land prices and total rural land prices.
Understanding Changes in Maori Incomes and Income Equality 1997-2003
Authors:   Motu Economic and Public Policy Research, Dixon Sylvia , Maré David
Published: April 2018

This paper reports findings from a study of changes in Maori income levels and income dispersion between 1997 and 2003. Data from Statistics New Zealand's Income Survey are used to describe and evaluate the main changes in the Maori income distribution in this period, which was marked by substantial increases in employment rates and improvements in the skill levels of working-aged Maori. A parallel analysis of the main changes in the European/Pakeha income distribution is provided for comparative purposes. The results show significant reductions in the proportion of Maori with no weekly income in the reference week, or incomes of $150-200 a week, and significant increases in the proportion with incomes above the peak income level of approximately $550 per week. Income inequality within the total working-aged Maori population declined, while income inequality among employed Maori was stable. An analysis of some of the key factors contributing to change in the income distribution suggests that the transition of many Maori into employment during this period was the single most important driver of change.
Regional Variation in Rental Costs for Larger Households
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Sourell Robert , Aitken Andrew
Published: April 2018

Housing costs comprise a major part of most household budgets. Larger households require greater space than do smaller households but do not necessarily have larger incomes. The cost of extra housing space (e.g. the cost of an extra bedroom) may vary across different locations, both absolutely (dollars per week) and proportionately (percentage of overall costs). If this is the case, differential regional costs of additional space may provide an incentive for different sized households to locate in particular areas where housing costs most appropriately fit their needs. Our analysis uses tenancy bond rental data to analyse the cost of renting an extra bedroom in different locations throughout New Zealand. It discusses the theory of what determines rents. We then examine the nature of regional rental costs, testing whether the documented patterns fit with theoretical predictions. Finally, we reflect on what the results may imply for social outcomes and housing policy in New Zealand. To give a flavour of the issues, consider the following. In 2003, the average weekly rental cost of a two bedroom dwelling in Auckland was $37 more than for a one bedroom dwelling. The cost of a third bedroom was an extra $50 and the cost of a fourth bedroom was an additional $90. Thus weekly rental cost for a four bedroom dwelling exceeded that of a one bedroom dwelling by $177. In Manawatu-Wanganui, the cost of a two bedroom dwelling was $38 more than for a one bedroom dwelling - almost identical to the margin in Auckland. But the cost of additional bedrooms was much lower than in Auckland: $29 for a third bedroom and $33 for a fourth bedroom. This raw data might suggest that it would be beneficial for larger households to locate in Manawatu-Wanganui and for smaller households to locate in Auckland. However, the interaction with other factors has to be taken into account before such a conclusion can be reached. At the minimum, the data suggests there is a material issue to be addressed relating to disparities in regional housing costs for different sized households.
The Geographical Mobility of Maori in New Zealand
Authors:   Motu Economic and Public Policy Research, Sin Isabelle , Stillman Steven
Published: April 2018

This paper describes the geographical location and internal mobility of the Maori ethnic group in New Zealand between 1991 and 2001. It is often suggested that Maori are less mobile than other ethnic groups because of attachment to particular geographical locations. We compare the mobility of Maori in particular locations to the mobility of similar Europeans in those same locations and find that, contrary to this anecdotal evidence, most Maori are, on average, more mobile than Europeans in New Zealand. We do find that the roughly forty percent of Maori who live in areas local to their iwi (tribe) are less mobile than comparable Europeans in those same areas. Defining local areas both based on both traditional iwi locations and current iwi populations, we find suggestive evidence that social ties are more important than land-based attachment in explaining why these Maori are relatively less mobile, but that land-based attachment is also an important impediment to mobility.
Changes in the Maori Income Distribution: Evidence from the Population Census
Authors:   Motu Economic and Public Policy Research, Dixon Sylvia , Maré David
Published: April 2018

This paper uses census data to identify the main changes in the individual-level income distribution of working-aged Maori between 1991 and 2001, and to analyse the effects of changes in the distribution of socio-demographic attributes and labour market activity patterns on the Maori income distribution. There was substantial real income growth at most points in the income distribution, and particularly at points above the 30th percentile, but a decline in real incomes at the very lowest percentiles. The socio-demographic and labour market changes considered help to explain much of the income growth that was recorded at lower-middle to upper levels of income. However, they fail to account for the increase in the proportion of people with negative, nil, or very low incomes.
Examining Changes in the Value of Rural Land in New Zealand between 1989 and 2003
Authors:   Motu Economic and Public Policy Research, Stillman Steven
Published: April 2018

This paper uses valuation data from Quotable Value New Zealand to examine changes in the value of the rural land in New Zealand between 1989 and 2003. The value of rural land reflects the profitability of agriculture as well as the returns to alternative land uses, and has a large impact on the prosperity of rural areas. The paper highlights the importance of both changes in land use and changes in the value of land in different uses in explaining overall changes in land values. It also examines the relationship among productive characteristics of the land, the local climate, various local amenities, and changes in land values and land use to better understand what factors have been driving overall changes in the value of rural land across New Zealand. We find that the real value of rural land in all uses increased substantially over the years being examined. Land use in rural areas also changed considerably during this period, but these changes in land use were essentially uncorrelated with changes in land values. Our regression results indicate that rural land values increased the most in less populated areas with good climates and local amenities. Initial land use also plays an important role in explaining the variation in changes in rural land values with greater increases in land values found in areas with more land initially devoted to urban uses and commercial forestry, and less land initially devoted to horticulture and lifestyle uses.
The likely regional impacts of an agricultural emissions policy in New Zealand: Preliminary analysis
Authors:   Motu Economic and Public Policy Research, Kerr Suzi , Hendy Joanna , Brunton Emma , Sin Isabelle
Published: April 2018

Hendy and Kerr (2005b) find that an emissions charge on agricultural methane and nitrous oxide of $25 per tonne of carbon dioxide (CO2) equivalent would be likely to reduce New Zealand's net land-use related emissions for commitment period one in the order of 3%, with full accounting. The costs per farmer and as a percentage of profit would be very high. This paper considers the regional impacts of such a policy in New Zealand by allocating the emission charge across space according to the location of animals. We then combine our emissions charge information with data on the socio-economic characteristics of the affected areas. Obviously rural areas are heavily affected. In many respects, for example median income, ethnic mix, and percentage of working people with a university degree, the rural areas most affected have very similar socio-economic characteristics to other parts of rural New Zealand. Only in two ways do they appear to differ. Our findings indicate that areas with high emission costs tend to have high employment rates, but that they also have a disproportionately high number of unqualified people.
Defining Geographic Communities
Authors:   Motu Economic and Public Policy Research, Maré David , Poland Michelle
Published: April 2018

The purpose of this paper is to provide a guide to concepts, ideas, and measurements of geographic communities. The paper investigates the various concepts of geographic communities found in the literature and reviews existing studies to determine how researchers measure geographic communities in practice.
Is there long-run convergence of regional house prices in the UK?
Authors:   Motu Economic and Public Policy Research, Holmes Mark , Grimes Arthur
Published: April 2018

This paper investigates the long-run convergence of regional house prices in the UK. Using a variety of econometric methods, existing studies have failed to reach a consensus on whether or not regional house prices are cointegrated and exhibit long-run constancy relative to each other. We propose the application of a new test that combines principal components analysis with unit root testing to throw new light on the regional convergence debate. Using mix-adjusted quarterly house price data for 1973-2005, we find that existing unit root and cointegration methodologies indicate the presence of multiple stochastic trends with, at best, very weak evidence of long-run convergence. However, testing for the stationarity of the largest principal component based on regional house price differentials suggests that all UK regional house prices are driven by a single common stochastic trend and can be regarded as exhibiting strong convergence in the long-run. Further analysis suggests there is a high degree of persistence in regional house price differentials.
Concentration, Specialisation and Agglomeration of firms in New Zealand
Authors:   Motu Economic and Public Policy Research, Maré David
Published: April 2018

To what extent do New Zealand firms choose to locate close to each other, and why? This paper summarises patterns of geographic concentration of firms in New Zealand between 1987 and 2003. We present a range of summary measures of own-industry concentration, and examine between-industry colocation. Overall, New Zealand employment is relatively highly concentrated, although only around 30 percent of employment is in highly concentrated industries. Around 60 percent of employment is in industries that are spread more or less in proportion to total employment. Geographic concentration across 58 Labour Market Areas (LMAs) has increased over the past 18 years, although industries have become more dispersed within LMAs. We find little evidence of a causal effect of geographic concentration of industries, or of diversity of local industry structure on employment growth or job flow rates. Rates of job creation, job destruction, and net employment growth are higher for industries that are more geographically concentrated, but the relationship disappears when we control for area and industry fixed effects. This suggests that it is not the concentration per se that is driving the high flows and employment growth, but other unobserved characteristics of areas and industries.
Maori economic development - Glimpses from statistical sources
Authors:   Motu Economic and Public Policy Research, Coleman Andrew , Dixon Sylvia , Maré David
Published: April 2018

This draft book chapter provide an overview of Maori economic development during the past 150 years, drawing on readily available statistical and historical sources. The path of Maori economic development that we have traced through statistical evidence is one of ongoing change and adaptation, as well as one of substantial increase in material standards of living, albeit with periods of significant setback.
Is Infrastructure Productive? Evaluating the effects of specific infrastructure projects on firm productivity within New Zealand
Authors:   Motu Economic and Public Policy Research, Timmins Jason
Published: April 2018

The paper investigates the feasibility of using a variant of the spatial equilibrium model to estimate the productivity effects of a specific infrastructure project in New Zealand. Policy makers are interested in the marginal effects of infrastructure investment on productivity and an evaluation of such effects would provide a useful check on the appropriateness and adequacy of current decision rules and institutions. To date, there appear to be no examples of using a spatial equilibrium model to estimate the productivity effects of a specific infrastructure project. However, the analysis in this paper suggests that such an approach is feasible. There is a range of data and estimation issues that needs to be addressed in the use of a spatial equilibrium model for this purpose, but we find that a reasonably useful range of data is available in New Zealand. The next step in determining feasibility is to select a particular infrastructure project, and to develop an empirical model based on available data.
Housing Supply and Price Adjustment
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Aitken Andrew
Published: April 2018

We analyse two inter-related features of regional housing markets: determinants of new housing supply, and the impact of supply responsiveness on price dynamics. We demonstrate that a suitably specified q-theory model (including residential land values as well as construction costs) explains intended housing starts. Few prior studies have found significant land price effects, due either to their omission or (possibly) to incorrect data definition (use of agricultural rather than residential land values). We examine the interaction of supply responsiveness and price adjustment following demand shocks, using a new panel dataset covering 53 quarters across 73 regions of New Zealand. Regions with high supply responsiveness have relatively small price spikes following demand shocks, consistent with a rational response that limits house price jumps in regions with strong supply responses.
How Important is Selection? Experimental vs Non-experimental Measures of the Income Gains of Migration
Authors:   Motu Economic and Public Policy Research, McKenzie David , Gibson John , Stillman Steve
Published: April 2018

Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it hard to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of noncompliance among some of those whose names were drawn. We also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group to the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well.
The Ups and Downs of New Zealand House Prices
Authors:   Motu Economic and Public Policy Research, Hall Viv , McDermott John
Published: April 2018

This paper identifies the expansion and contraction phases of New Zealand's national and regional house prices, by employing techniques typically used to study cycles in real activity, the so-called Classical cycle dating method. We then enquire into the nature of the cycles, addressing five questions: (1) What are the New Zealand and regional house price cycles, and do the regional cycles differ from the national cycle?; (2) What are the typical durations, magnitudes and shapes of these house price cycles?; (3) Do cycles in house prices match cycles in economic activity, at either national or regional levels?; (4) Does it matter which of the two main sets of house price series are used? i.e. Quotable Value New Zealand (QVNZ) or Real Estate Institute of New Zealand (REINZ)?; and (5) Does the sample period matter? Findings are evaluated in the context of work by Grimes, Aitken and Kerr (2004), and Hall and McDermott (2005). Avenues for further research are suggested.
Greenhouse gas emissions charges and credits agricultural land: what can a model tell us?
Authors:   Motu Economic and Public Policy Research, Hendy Joanna , Kerr Suzi , Baisden Troy
Published: April 2018

Using the simulation model Land Use in Rural New Zealand version 1 -climate (LURNZv1-climate), we simulate the effects of an agricultural land-use emissions charge and a reward for native forest and scrub regeneration. Our results are preliminary and at this stage should be considered illustrative. We find that, on its own, an agricultural emissions charge based on solely on land use would be disruptive and may not be very effective in reducing emissions. In addition, we find that including an additional policy that rewards regenerating forest and scrub without a similar reward for plantation forestry might negatively impact on plantation forestry, increasing emissions growth in the short-run. We are currently developing a second version of LURNZ-climate, which will be more robust and thus lend more weight to our future results.
Land Use Intensity Module: Land Use in Rural New Zealand Version 1
Authors:   Motu Economic and Public Policy Research, Hendy Joanna , Kerr Suzi
Published: April 2018

This document outlines the development of the dynamic functions and simple algorithms that make up the Land Use in Rural New Zealand (LURNZ) land-use intensity module. The module includes stocking rate functions for dairy, sheep, and beef livestock; fertiliser intensity functions for dairy and sheep/beef; and algorithms for the evolution of the age classes of the plantation forestry estate, and of reverting scrubland. This module is designed so that: (1) output from models of rural production and rural land use can be compared using the land-use intensity functions as conversion factors; (2) output from the land use module of LURNZ can be converted into the implied levels of rural activities that can be directly related to certain environmental impacts. This module is part of the LURNZv1 simulation model and can be used in conjunction with the LURNZ land use and greenhouse gas modules.
Labour Market Outcomes for Young Graduates
Authors:   Motu Economic and Public Policy Research, Maré David , Liang Yun
Published: April 2018

This paper examines income and employment outcomes for 18 to 30 year old New Zealanders with post-school qualifications, using data from the 1996 and 2001 Censi. Outcomes are analysed by field of study, to highlight the variation in outcomes within the post-school graduate (PSG) population. Fields are characterised according to the specialisation of job choices made by PSGs. A preliminary investigation is undertaken of changes in supply and demand of PSGs in different fields. Part A of the report summarises patterns for all PSGs, and compares fields of study. Part B contains field profiles for each of 26 grouped fields of study that can be compared across the two years.
Defining Areas: Linking Geographic Data in New Zealand
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Maré David , Morten Melanie
Published: April 2018

This paper develops a match quality statistic to quantify the trade-off between 'specificity' and 'completeness' when aggregating one regional aggregation to another. We apply this statistic to calculate the degree of mismatch between various regional aggregations for New Zealand using 1991 and 2001 Census Data. A program to calculate mismatch statistics is included as an appendix, as a Stata(r) ado file.
Inequality and Health: Is Housing Crowding the Link?
Authors:   Motu Economic and Public Policy Research, Maani Sholeh A. , Vaithianathan Rhema , Wolfe Barbara
Published: April 2018

In this study we extend the literature (e.g. Deaton, 2002a; Kennedy and Kawachi, 1996; Wilkinson, 1996) by proposing a new mechanism through which income inequality can influence health. We argue that increased income inequality induces household crowding, which in turn leads to increased rates of infectious diseases. We use data from New Zealand that links hospital discharge rates with community-level characteristics to explore this hypothesis. Our results provide support for a differential effect of income inequality and housing crowding on rates of hospital admissions for infectious diseases among children. Importantly, we find that genetic and non-communicable diseases do not show these joint crowding and inequality effects. The effect of housing on communicable diseases provides a biological foundation for an income inequality gradient.
House Prices and Rents: Socio-Economic Impacts and Prospects
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Aitken Andrew
Published: April 2018

We use New Zealand property data at the area unit (suburb) level to examine implied prospects for communities over time, and test whether these derived prospects have explanatory power relating to actual future outcomes. We also use the data to analyse whether disadvantaged communities face particular problems in relation to rental markets. Our results indicate that: capital gains and rental growth expectations historically have appeared reasonable in that they have not been suggestive of asset bubbles or other fad behaviour; derived capital gains and rental growth expectations have explanatory power both over actual future capital gains and actual future rental growth; and lower socio-economic areas face higher rental yields even after controlling for non-socio-economic factors than do high socio-economic areas.
New Zealand's Quota Management System: A History of the First 20 Years
Authors:   Motu Economic and Public Policy Research, Lock Kelly , Leslie Stefan
Published: April 2018

New Zealand is a world leader in the use of Individual Transferable Quota (ITQ) to manage fisheries. Although the use of an ITQ system is not unique to New Zealand, no other country has used this system to the same extent as New Zealand. This has meant that, internationally, a lot of interest has been placed on how our system works and the level of success it has achieved. Generally, the New Zealand system is considered to be a success story, yet the system has changed a number of times since its inception in 1986. Despite the level of interest in New Zealand's unique ITQ system, the current literature is unable to provide a complete account of the historic and current regulations surrounding it. This paper addresses this gap by documenting how the Quota Management System (QMS) functions and the changes it has undergone since its introduction. Reviewing these changes facilitates a deeper understanding of the system itself, as well as providing insight into its potential limitations.
Towards Design for a Nutrient Trading Programme to Improve Water Quality in Lake Rotorua
Authors:   Motu Economic and Public Policy Research, Kerr Suzi , Lauder Glen , Fairman David
Published: April 2018

This paper explores how to enhance the role for academic research (natural sciences, economics and their integration; and stakeholder management) within the development and implementation of water quality policy in New Zealand. Our focus is on the use of market based instruments and particularly nutrient trading programmes, which are one important part of the potential tool kit to address these issues. We discuss why nutrient trading might be an appropriate instrument for the Lake Rotorua catchment. We survey the existing literature and then outline the outstanding scientific, economic and governance questions that need to be addressed to design an effective trading programme. Finally we discuss how to design a process to address these questions drawing on both technical and practical knowledge through a learning process.
An Auckland Land Value Annual Database
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Liang Yun
Published: April 2018

We construct an annual land value database at the meshblock (MB) level for the Greater Auckland region. The database provides a resource for research work that requires land values (per hectare) across the region. The data is based on valuation records sourced from Quotable Value New Zealand (QVNZ). It covers seven Territorial Authorities (TAs): Rodney District, North Shore City, Waitakere City, Auckland City, Manukau City, Papakura District and Franklin District. The valuation data, which are generally available on a three-yearly cycle for each TA, are interpolated to annual frequency using sale price data for residential vacant land at the TA level. The resulting database extends from 1990-2003 (annually) for MBs in all seven TAs. In some TAs, data are available for slightly longer periods depending on source data availability.
The Impact of Immigration on the Geographic Mobility of New Zealanders
Authors:   Motu Economic and Public Policy Research, Stillman Steven , Maré David
Published: April 2018

This paper uses data from the New Zealand Census to examine how the supply of recent migrants in particular skill groups affects the geographic mobility of the New Zealand-born and earlier migrants. We identify the impact of recent migration on mobility using the 'areaanalysis' approach, which exploits the fact that immigration is spatially concentrated, and thus a change in the local supply of migrants in a particular skill group should have an impact on the mobility of similarly skilled non-migrants in that local labour market. Overall, our results provide little support for the hypothesis that migrant inflows displace either the NZ-born or earlier migrants with similar skills in the areas that new migrants are settling. If anything, they suggest that there are positive spillovers between recent migrants and other individuals that encourage individuals to move to or remain in the areas in which similarly skilled migrants are settling. Thus, it appears unlikely that internal mobility moderates any potential impacts of immigration on labour or housing markets in New Zealand.
Nutrient Trading in Lake Rotorua: Where are we Now?
Authors:   Motu Economic and Public Policy Research, Lock Kelly , Kerr Suzi
Published: April 2018

A number of decisions need to be made when setting up a nutrient trading system including defining a target, allocating allowances and setting up a monitoring system. To ensure that the nutrient trading system implemented operates in harmony with existing regulation, existing work and institutions need to be used to guide this decision making process. This paper briefly explores each of the decisions required to implement a nutrient trading system and to what extent they have been addressed so far. This will provide context for following papers which will examine each issue in more depth.
The Land Use in Rural New Zealand Model Version 1 (LURNZv1: Model Description)
Authors:   Motu Economic and Public Policy Research, Hendy Joanna , Kerr Suzi , Baisden Troy
Published: April 2018

This paper documents the first version of the Land Use in Rural New Zealand Model (LURNZv1). It describes the overall modelling approach, the database underlying the model, and the construction of each module within the model. The model is econometrically estimated from national time series data and spatially extrapolated using economic and geophysical variables. It is primarily a simulation model but is also set up to produce predictions based on future price scenarios. The model output includes projections of four types of rural land use under different scenarios and 25 ha grid maps of where land use, and changes in land use, are likely to occur.
Nutrient Trading in Lake Rotorua: Goals and Trading Caps
Authors:   Motu Economic and Public Policy Research, Kerr Suzi , Rutherford Kit , Lock Kelly
Published: April 2018

For a nutrient trading system to achieve the desired environmental outcome, or goal, this outcome needs to be translated into nutrient flows and allowances. To connect the nutrient loss provided for under the allowances with the environmental goal, a number of decisions need to be made. These decisions will shape the nutrient trading system. This paper looks at the information and analysis needed to ultimately define allowances and set trading caps for a nutrient trading system.
Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect?
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Liang Yun
Published: April 2018

Land prices within monocentric cities typically decline from the centre to the urban periphery. More complex patterns are observed in polycentric and coastal cities; discrete jumps in value can occur across zoning boundaries. Information on these patterns within Auckland is important to understand: (a) the nature of Auckland's development, including the impact of infrastructure investments; and (b) the effects of regulation in causing discrete land valuation changes. One such regulation in Auckland is the metropolitan urban limit (MUL); we specifically examine whether the existence of this growth limit affects land prices. We do so in the context of a model of all Auckland land values over a twelve-year period, finding a strong zoning boundary effect on land prices.
Adjustment in Local Labour and Housing Markets
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Maré David , Morten Melanie
Published: April 2018

This paper analyses local labour and hosuing market adjustment in New Zealand from 1989 to 2006. We use a VAR approach to examine the adjustment of employment, employment rate, participation rate, wages, and house prices in response to employment shocks. Migration is a major adjustment response at both a national and regional level. Nationally, a 1% positive employment shock leads to a long-run level of employment 1.3% higher, with half of the extra jobs filled by migrants. A 1% region-specific employment shock raises the long-run regional share of employment by 0.5 percentage points, due entirely to in-migration. House price responses differ at different spatial scales. Nationally, house prices are very responsive to employment shocks: a 1% employment shock raising long run house prices by 6% , as may be expected with an upward sloping housing supply curve. Paradoxically, this relationship does not hold at the regional level.
Settlement Patterns and the Geographic Mobility of Recent Migrants to New Zealand
Authors:   Motu Economic and Public Policy Research, Maré David , Stillman Steven , Morten Melanie
Published: April 2018

Twenty-three percent of New Zealand's population is foreign-born and forty percent of migrants have arrived in the past ten years. Newly arriving migrants tend to settle in spatially concentrated areas and this is especially true in New Zealand. This paper uses census data to examine the characteristics of local areas that attract new migrants and gauges the extent to which migrants are choosing to settle where there are the best labour market opportunities as opposed to where there are already established migrant networks. We estimate McFadden's choice models to examine both the initial location choice made by new migrants and the internal mobility of this cohort of migrants five years later. This allows us to examine whether the factors that affect settlement decision change as migrants spend more time in New Zealand.
What Explains the Wealth Gap Between Immigrants and the New Zealand Born?
Authors:   Motu Economic and Public Policy Research, Gibson John , Le Trinh , Stillman Steven
Published: April 2018

Immigrants are typically found to have less wealth and hold it in different forms than the native born. These differences may affect both the economic assimilation of immigrants and overall portfolio allocation when immigrants are a large share of the population, as in New Zealand. In this paper, data from the 2001 Household Savings Survey are used to examine wealth differences between immigrants and the New Zealand-born. Differences in the allocation of portfolios between housing and other forms of wealth are described. Unconditional and conditional wealth quantiles are examined using parametric models. Semiparametric methods are used to decompose differences in net worth at different parts of the wealth distribution into the part due to differences in characteristics and the part due to differences in the returns to characteristics.
A Quarterly Post-World War II Real GDP Series for New Zealand
Authors:   Motu Economic and Public Policy Research, Hall Viv , McDermott John
Published: April 2018

There are no official quarterly real GDP estimates for New Zealand for the period prior to 1977. We develop a seasonally adjusted series for 1947q2 to 2006q2, by linking quarterly observations from two recent official series to temporally disaggregated observations for an earlier time period. Annual real GDP series are disaggregated, using the information from two quarterly diffusion indexes, developed by Haywood and Campbell (1976). Three econometric models are used: the Chow and Lin (1971) model that disaggregates the level of GDP, and the Fernández (1981) and Litterman (1983) models that disaggregate changes in GDP. Statistical properties of the series are evaluated, and movements in the new series are benchmarked against qualitative research findings from New Zealand's post-WWII economic history. Our preferred quarterly series is based on results generated from the Chow-Lin model.
ESSAM General Equilibrium Model: Estimation of 2005/06 Input-Output Tables
Authors:   Motu Economic and Public Policy Research, Stroombergen Adolf
Published: April 2018

This paper describes the compilation of a preliminary input-output able for 2005/06 for use in the ESSAM (Energy Substitution, Social Accounting Matrix) general equilibrium model. A more accurate update is expected to be undertaken in 2009/10 with the envisaged release by Statistics New Zealand of an official set of input-output tables for 2005/06. The last official set of input-output tables produced by SNZ relates to 1995/96. The updating process comprised four main phases: 1. Analysis in the SNA Data Laboratory 2. Balancing of the input-output table 3. Re-aggregation of industries 4. Update to 2005/06 Associated data tables are available for download from www.motu.org.nz/docs/IO2005-06.xls. Please advise info@motu.org.nz when you download this data.
Nutrient Trading in Lake Rotorua: Overview of a Prototype System
Authors:   Motu Economic and Public Policy Research, Lock Kelly , Kerr Suzi
Published: April 2018

Water quality in Lake Rotorua has been declining for at least the last 30 years as increased levels of nutrients have entered the lake. Despite significant effort and expenditure, the level of nutrients entering the lake still exceeds sustainable levels. A nutrient trading system would help the catchment achieve this goal at least cost. Nutrient sources would bear the cost of their impact on water quality and hence take these costs into account in their decision-making. This paper presents a prototype nutrient trading system for achieving cost effective nutrient loss reductions for the Lake Rotorua catchment.
Nutrient Trading in Lake Rotorua: Determining Net Nutrient Inputs
Authors:   Motu Economic and Public Policy Research, Kerr Suzi , RutherfordT Kit
Published: April 2018

Lake Rotorua is experiencing increasing nutrient-related water quality problems. This paper is one in a series that explores the idea of creating a nutrient trading system as part of the ongoing policy response to this problem.1 Most of the current nutrient flows to the Lake come from non-point rural sources - measuring these emissions is challenging. We find that it is possible to monitor/model nutrient loss from a wide range of activities in the Rotorua catchment. The model OVERSEER combined with ROTAN and some other models for forestry, urban and geothermal activities and horticulture already exist. They are currently in a process of enhancement - a particular area of current weakness is knowledge of the groundwater lags from specific locations in the catchment. The land-based models need to be used in a specific form that relies on initialisation with verifiable data and uses easily collated and verified data on an annual basis. The form of the model should be fixed for each regulatory year to minimise uncertainty for landowners and regulators. The models need to be updated to reflect new science. The process for doing this needs to be strategic and credible (this will be discussed in a later paper on governance processes). Once changes are recommended they need to be implemented in a way that is perceived to be fair.
Inclusion of Agriculture and Forestry in a Domestic Emissions Trading Scheme: New Zealand's Experience to Date
Authors:   Motu Economic and Public Policy Research, Kerr Suzi , Sweet Andrew
Published: April 2018

No country has previously attempted to include either agriculture or forestry in an emissions trading system. The New Zealand government is planning to include both. This paper describes how they plan to do it, what some of the critical issues have been and some of the outstanding challenges. If New Zealand can resolve these issues and so can create a strong system, this could create a precedent for many others. Policy development is actively progressing as this paper is written. This paper does not definitively cover the issues but records our thinking at a moment in time and provides a framework for more in-depth analysis.
Nutrient Trading in Lake Rotorua: Choosing the Scope of a Nutrient Trading System
Authors:   Motu Economic and Public Policy Research, Lock Kelly , Kerr Suzi
Published: April 2018

A nutrient trading system is one mechanism that is currently being considered to control and reduce nutrient loss into Lake Rotorua. However this may not be the best mechanism for controlling nutrient loss from all sources. A more comprehensive system improves efficiency and decreases market power opportunities, but it can also bring increased compliance and administrative costs. This paper discusses which sources should be included in a nutrient trading system for Lake Rotorua including. It examines existing systems and presents an empirical analysis to estimate the impact of including different nutrient sources.
Housing Markets and Migration: Evidence from New Zealand
Authors:   Motu Economic and Public Policy Research, Stillman Steve , Maré David C.
Published: April 2018

New Zealand's large and volatile external migration flows generate significant year-to-year fluctuations in the demand for residential housing. This paper uses population data from the 1986, 1991, 1996, 2001 and 2006 New Zealand Censuses, house sales price data from Quotable Value New Zealand and rent data from the Department of Building and Housing to examine how population change, international migration, including the return migration of New Zealanders abroad, and internal migration affect rents and sales prices of both apartments and houses in different housing markets in New Zealand. Our analysis focuses on the relationship between the changes in the population in local areas and changes in house sale prices and rents in these areas. Focusing on changes allows us to control for time-invariant unobservable characteristics of local areas that either attract or repel individuals and lead to differential costs of housing.
Bridge to Somewhere: The Value of Auckland's Northern Motorway Extensions
Authors:   Motu Economic and Public Policy Research, Grimes Arthur , Liang Yun
Published: April 2018

We estimate benefits that have resulted from extensions to Auckland's Northern Motorway since 1991. Population and employment rose substantially in locations near the new exits and to the north of the motorway extension, relative to developments elsewhere on the North Shore and in the broader Auckland Region. Land values also rose strongly near the new exits. Our approach to measuring net benefit uses changes in land values (after controlling for other factors) as a revealed preference indicator of value. We compare the estimated benefits with costs of the project to gain a measure of the project's benefit:cost ratio (B:C). Our results indicate that the gross benefit of the extensions from Tristram Avenue to Orewa is at least $2.3 billion (2004 NZ) compared with the estimated extension costs (discounted to 2004) of $366 million, giving a B:C ratio of at least 6.3, which exceeds the standard ratio of 4.0 used to approve roading projects in New Zealand. Our estimates take account of the possibility of diminution in value occurring elsewhere near the existing Northern Motorway network, but not in other areas of Auckland or elsewhere in the country. Conversely, they do not include any benefits that may be impounded in commercial property values in the CBD (and elsewhere) arising from increased accessibility to an enlarged labour pool.
The Relative Size of New Zealand Exchange Rate and Interest Rate Responses to News
Authors:   Motu Economic and Public Policy Research, Coleman Andrew , Karagedikli Özer
Published: April 2018

This paper examines the relative size of the effects of New Zealand monetary policy and macroeconomic data surprises on the spot exchange rate, 2 and 5 year swap rate differentials, and the synthetic forward exchange rate schedule. We find that the spot exchange rate and 5 year swap rates respond by a similar magnitude to monetary surprises, implying there is little response of the forward exchange rate to this type of news. In contrast, the spot exchange rate responds by nearly three times as much as 5 year interest rates to CPI and GDP surprises, implying that forward rates appreciate to higher than expected CPI or GDP news. This is in contrast to standard theoretical models and US evidence. Lastly, we show that exchange rates but not interest rates respond to current account news. The implications of these results for monetary policy are considered.
Inflation and the Measurement of Saving and Housing Affordability
Authors:   Motu Economic and Public Policy Research, Coleman Andrew
Published: April 2018

This paper analyses the effect of inflation on the measurement of saving and housing affordability in New Zealand. When the inflation rate is positive, the income and saving of lenders is overstated and the saving of borrowers is understated because a portion of the interest earnings on capital are not true earnings but merely compensation for inflation. Because New Zealand has a large international debt position, this distortion means aggregate saving is understated, possibly by 2 percent of gross domestic product per year. In addition, a standard measure of the cost of financing the purchase of a house is overstated by approximately fifty percent, as a large part of mortgage payments are actually saving. Nevertheless, at the end of 2007 the cost of financing house purchase in New Zealand was at a cyclical high, approximately 40 percent higher than its average level since 1990.