Countdown and wholesalers: Are consumers the ones benefiting?

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

Bright days ahead for New Zealand retailers?

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.

Recent unemployment is entirely cyclical?

The Treasury has just released a crop of Working Papers. Great to see and will read them with interest.

I had a quick read through the first one, which is on “Recent Unemployment Experience in New Zealand

It’s an interesting paper and worth a read. But they reach a surprisingly strong conclusion, where I think a more nuanced interpretation is required: Read more

The living wage again: Considering policy choices and trade-offs

I see a new living wage has been released (Via Kiwiblog).  We have posted about this recently, briefly noting some areas that need to be considered when thinking about this concept.

To help think about policy choices more broadly, Richard Meadows asked a few economists about making the minimum wage equivalent to the living wage (not what the living wage proponents are suggesting – but it is something people keep suggesting) and removing Working For Families.  The results of his conversations were here.

It was a good article, although I would note that I didn’t intend to come out quite as harshly against a tax-free threshold as I did – conceptually I see issues, but I want to leave my mind open until there is modelling work done to articulate the impacts and any potential trade-offs.  I did enjoy seeing the conclusions:

Crampton says he simply can’t say whether it’s better to take money from childless people – both rich and poor – and hand it over to low to middle income parents.  Economists can talk about the trade-offs involved and the likely effects of the policy, but moving beyond that becomes a value judgement, he says.

Hazledine is prepared to take a stand. ”I have long believed that excessive population growth is one of the major contributors to the problems of the modern world,” he says. ”So I am opposed to any pro-natalist ‘buying babies’ policies in any country, including our own.”

Nolan has read literature saying we should have higher birth rates – and other material saying just the opposite. ”Ultimately, this is an open question, and one that I don’t think is particularly useful for policy.” Instead, he says the best way to think about it is to consider people’s needs – and the trade-offs from the policies which are trying to address them.

I’ve asked Richard if I could put up the notes I scrapped together when discussing his piece – and he said that is cool.  As a result, my views and some of the questions that were asked, can be found below the flap.

This was written as a word document, and I have just pasted it across.  It hasn’t been edited into a blog form, hope people can still make use of it.  Would be happy to discuss the ideas in the comments, I’m a touch busy so it may take me a while to reply though :)

Note:  Eric does his write up here!

Read more

A ‘Top 10′ economics links for romance and matching

On Valentine’s Day I had the opportunity to write a Top 10 at 10 for the always good Rates Blog.  As it was Valentine’s Day I thought linking to some romantic economics might be a good idea.

As the sexiest economist competition started that day – I didn’t have the opportunity to point this out.  As a result, I’m doing it now!

Note:  If I had spotted it beforehand, this would have been in there.  Tim Harford is so good at communicating economic ideas!