From the Executive Director of Motu Research Kia ora and welcome to the first Motu News for 2019 and my first ever as Executive Director. I’m looking forward to the personal treat of getting to know the excellent staff and the intellectual challenge of becoming familiar with the wide range of work they produce.
I have been a Motu Affiliate since 2002 and believed I knew the organisation well, but even in my first fortnight here I am discovering the incredible variety of work our staff undertake. I know that many people think of Motu as a climate change think tank. And while it is a world leader in that field and is now expanding into environmental economic modelling, it does so much more. It undertakes world-leading research on science policy and innovation lead by our Senior Research Associate, Adam Jaffe, alongside Fellow Trinh Le. In addition, there is Arthur Grimes’ influential work in wellbeing economics and Dave Maré’s research in economic demographics, Isabelle Sin’s renowned studies in labour diversity, or Lynn Rigg’s burgeoning expertise in health economics in Aotearoa. Dean Hyslop is a world-leading econometrician and Anne-Marie Brook’s work on the Human Rights Measurement Initiative is literally world-changing.
I already know Motu is an incredible team and the top ranked economics organisation in New Zealand. My job, over the next few months, is to gain in-depth knowledge of the research and the personnel at Motu and to bring that to more use and prominence. Please do contact me on john.mcdermott@motu.org.nz if you would like to know more.
John McDermott Executive Director
Poor housing conditions in NZ cost millions every year
Preventable injuries and hospitalisations due only to poor housing conditions in NZ could be costing more than $145 million annually in ACC claims and hospitalisation costs according to new research from Motu Fellow, Lynn Riggs and researchers from He Kainga Oranga, the Housing and Health Research Programme, based at the University of Otago, Wellington. Dr Riggs presented her research, which will be followed up with a paper in the next few months, at the Wellington’s Public Health Summer School in February.
Research done in New Zealand before now has generally focused on the effect of a single housing condition on health outcomes and the associated burden of disease. The research by Dr Riggs and her co-authors builds on that research to estimate the combined burden of disease from multiple housing conditions – damp, cold, mould, and disrepair.
Rental properties are most problematic. In the year from April 2014-March 2015, 15 percent of owner-occupier homes were reported to be cold, compared to 35 percent of rental homes. Three percent of owner-occupied homes were damp or mouldy compared to 12 percent of rentals. Unsurprisingly, the statistics were worse the lower the income of the household.
The study found that homes that are damp or mouldy cause more than 35,000 nights in hospital with an associated cost of around $35 million. 32 percent of homes in New Zealand report problems with damp or mould. However, that $35 million does not include, for example, costs of time lost from work or school while patients are in hospital nor does it include GP visits or pharmaceutical costs.
In addition, household crowding causes more than 3,500 nights in hospital and costs nearly $5 million per year. Ten percent of Aotearoa’s population live in crowded housing. Nearly 2,000 nights in hospital are due to homes being cold, with a cost of more than $2 million per year. Twenty-one percent of New Zealanders report their house is always or often cold.
New Zealand’s top towns to live and work
A new study from Motu for the Building Better Homes, Towns, and Cities (BBHTC) National Science Challenge uses a deep-dive analysis of census rent and wage data to compile quality of life and quality of business measures for 130 towns and cities in New Zealand. The report lays a framework so that BBHTC researchers can go on to identify actionable solutions that we can use to improve our lives.
Households and firms prefer different amenities, which means places with high quality of life often have low quality of business. For instance, households appear to prefer sunny, dry locations near water, while firms appear to prefer to locate in larger cities.
The top eight towns identified as having the highest quality of life in 2013, were Whitianga, Motueka, Coromandel, Queenstown, Katikati, Mapua, Moerewa and Opotiki. Interestingly, the study shows that since the mid-1990s, places with increasing shares of their workforce engaged in education and health have risen in perceived quality of life. The research found no evidence that increasing employment share in the accommodation, food, arts, and recreational services is associated with an increase in quality of life, at least outside the large cities. It seems that places that are nice to live in are generally rich in employment in these sectors. However, intensifying those industries in a given city does not necessarily improve quality of life.
There are a few cities in New Zealand that are attractive to both people and firms: Christchurch, Tauranga and Queenstown. Over the 37-year period analysed, people's perception of quality of life and quality of business in these places remained relatively stable. However, as some cities do experience increases or decreases in these measures over time, it signals that it is possible for locations with poor performance on these measures to improve, and vice versa.
Unsurprisingly, in 2013, the top eight towns for firms (and hence work opportunities) were in or around New Zealand's three biggest cities: Auckland (Auckland, Waiuku, Te Kauwhata, Pukekohe), Wellington (Wellington, Kapiti) and Christchurch (Rolleston, Lincoln).
Pacific migrants just as likely to be employed as other migrants, but lower paid
Three years after arriving in New Zealand, 95 percent of Pacific migrants were either very satisfied or satisfied with New Zealand. Isabelle Sin, Senior Fellow at Motu Economic and Public Policy Research, researched a group of Pacific migrants who gained residence approval in New Zealand between November 2004 and October 2005. The research, conducted for the Ministry of Business, Innovation and Employment, followed their outcomes until 2017 using a range of data sources. Comparisons made focus on migrants from Fiji, Tonga, and Samoa and migrants on different types of visa.
In the first three years after residence was approved, satisfaction with New Zealand and feelings of being settled were generally high regardless of their degree of economic success in New Zealand. Satisfaction and feelings of being settled declined over time.
A high proportion of Pacific migrants in this research group were still in New Zealand twelve years after being granted a visa. The proportion of migrants from Samoa and Tonga who stayed was below 80 percent, while around 90 percent of those from Fiji or other Pacific countries were still in Aotearoa twelve years later.
Pacific migrants had a similar likelihood of being employed compared to non-Pacific migrants of the same gender. However, Pacific migrants of both genders earned considerably lower wages. Those with limited English and low education levels appear to be caught in low-paying or part-time work. Pacific migrants were much less likely to report that English was the language they spoke best (38 percent vs 62 percent), although only 12 percent stated that their English was poor compared with 8 percent of other migrants. Only 9 percent of Pacific migrants for whom English was not their best language studied English in New Zealand. In contrast, 40 percent of such non-Pacific migrants did so. Despite their lower wages, over half Samoan and Tongan migrants said they sent money back home to others. In comparison, only 14 percent of non-Pacific migrants sent money overseas.
It is likely Pacific migrants were particularly vulnerable to weak economic conditions. However, the Pacific migrants in this research were successful at accessing benefits to which they were entitled – migrants from other regions did less well. During the Global Financial Crisis, Pacific migrants experienced larger increases in receiving benefits than non-Pacific migrants. The proportion of female Pacific migrants receiving a benefit rose from 7 percent in 2006 to over 20 percent in 2010, and fell only gradually over the following years.
Housing outcomes were closely linked to economic outcomes. Fijian migrants, who had strong economic outcomes, had a home ownership rate of 45 percent in 2013, compared with around 10 percent for other Pacific migrants. Over 50 percent of those on Skilled/Business visas owned homes in 2013.
Current European regional policy promotes “smart specialisation” by encouraging regions to expand into activities that “build on local strengths.” Smart specialisation rests upon the idea that bringing together people with complementary skills helps them generate new ideas that boost innovation and growth.
Recent analysis by Benjamin Davies and Dr David Maré, both of Motu Economic and Public Policy Research, examines the potential for this way of generating ideas to promote urban employment growth in New Zealand. They find that, in New Zealand, the presence of related industries in an area is not a strong predictor of local employment growth.
The research draws upon the ideas of relatedness and complexity. Relatedness captures the extent to which the jobs in a region depend on the presence of other local activities. Complexity captures the extent to which workers benefit from the presence of other workers with complementary skills or businesses do better when related activities are present locally. For example, management consultants need clients, whereas university lecturers are more able to ‘go it alone’.
Complex activities experienced faster employment growth during the period of study, especially in complex cities. However, this growth was not significantly stronger in cities where there were more firms engaged in related activities. Relatedness and complexity appear to be relevant for analysing how large, complex cities grow, but offer less information about growth trajectories for small towns. This result is consistent with the idea that cities are dense networks of interacting activities. In our New Zealand data, the benefits of such interaction are more apparent in larger cities, in which workers with similar skills interact more frequently.
The study, “Relatedness, Complexity and Local Growth”, received funding from Te Pūnaha Matatini, and from the Better Homes, Towns and Cities National Science Challenge.
Dean R. Hyslop & Wilbur Townsend (2018) Earnings Dynamics and Measurement Error in Matched Survey and Administrative Data, Journal of Business & Economic Statistics, DOI: 10.1080/07350015.2018.1514308 This article analyzes earnings dynamics and measurement error using a matched longitudinal sample of individuals’ survey and administrative earnings. In line with previous literature, the reported differences are characterized by both persistent and transitory factors. Estimating a model consistent with past results, survey errors are mean-reverting when administrative reports are assumed correct, but not when this assumption is relaxed. Although most reported earnings variation is true, we conclude that measurement errors dominate observed changes, and that transitory earnings contribute little to overall earnings inequality. The results imply the reliability of matched administrative data should be treated with caution.
Carver, Thomas & Arthur Grimes. “Income or consumption: Which better predicts subjective wellbeing?” Review of Income and Wealth. https://onlinelibrary.wiley.com/journal/14754991 The positive relationship between income and subjective wellbeing has been well documented. However, work assessing the relationship of alternative material wellbeing metrics to subjective wellbeing is limited. Consistent with the permanent income hypothesis, we find that a consumption measure out-performs income in predicting subjective wellbeing. When objective measures of consumption are combined with self-assessments of a household’s standard of living, income becomes insignificant altogether. We obtain our result utilising household-level data from Statistics New Zealand’s ‘New Zealand General Social Survey’ which contains a measure of material wellbeing called the ‘Economic Living Standard Index’ that combines measures of consumption flows and self-assessments of material wellbeing.
Preston, Kate & Arthur Grimes. “Migration, gender, wages and wellbeing: Who gains and in which ways?” Social Indicators Research, January 2019, DOI: 10.1007/s11205-019-02079-y Empirical studies have consistently documented that while married men tend to lead more prosperous careers after moving, migration tends to be disruptive for careers of married women. We extend this literature by exploring whether migration is followed by a change in subjective wellbeing (SWB). We examine how this experience differs by individuals of different gender, relationship-status and motivations for moving (of both partners in a couple relationship, where relevant). The results are compared to wage differences following migration. All results are conditioned on time-varying personal characteristics, including important life events. Consistent with prior literature, males have a stronger tendency than females to increase their earnings after moving. However, we find that females have a stronger tendency than males to increase their SWB following a move. These gender differences are pronounced for couples. Differences tend to narrow, but do not disappear, once we account for motivations for moving of individuals and, where relevant, of their partner.
Yeo, BL. & Coleman, A. "Taxes versus emissions trading system: evaluating environmental policies that affect multiple types of pollution" Environmental Economics and Policy Studies, January 2019, Volume 21, Issue 1, pp 141–169. https://doi.org/10.1007/s10018-018-0225-x This paper examines the interaction of different policies used to control two types of agricultural pollution. Pollution control policy is efficient when both pollution types are controlled by taxes, although a tax increase on one type of pollution can increase the quantity of another type of pollution if farm inputs are substitutes. However, if one of the pollutions is controlled by a local emissions trading scheme, and another pollution type is taxed, then the pollution type which is taxed becomes less responsive to a change in its own tax levels. This policy scenario results in inefficient levels of environmental pollution outcomes unless the cap for the local emissions trading scheme is constantly being shifted in response to the tax.
Wesselbaum, Dennis & Arthur Grimes. “Moving towards happiness.” International Migration, January 2019, DOI: https://doi.org/10.1111/imig.12546 We add to the literature on the driving forces of international migration. While the existing literature establishes that income differences, migration costs and certain other factors (e.g. climate or human rights) affect the migration decision, we focus on the broader role of non‐pecuniary factors. We include well‐being measures in a standard model of bilateral migration flows and enrich the analysis further by testing the effects on migration of inequality in happiness within a country. Our findings that both the mean and standard deviation of happiness – in both origin and destination countries – help explain bilateral migration flows over and above any income effect, indicates the need to incorporate both pecuniary and non‐pecuniary factors when modelling migration choices.
OECD (2018), "Effective operation of competitive research funding systems", OECD Science, Technology and Industry Policy Papers, No. 57, OECD Publishing, Paris,https://doi.org/10.1787/2ae8c0dc-en. In OECD countries, much science funding is allocated via competitive mechanisms. Competitive funding schemes are widely favoured for being the optimal method for not only evaluating but also encouraging scientific excellence, in a process that is controlled by the community itself. Increasingly however, additional objectives, such as a demand for socio-economic value, are included in the process. The reliance of competitive systems on peer review brings up some concerns about the reliability and validity of evaluation processes in assuring the selection of the best proposals considering the breadth of objectives they are expected to fulfill. Competitive funding processes are also costly, both to awarding agencies and research performers. This report analyses existing competitive research funding mechanisms and their effectiveness, taking into account a variety of contextual factors. It is aimed both at the research funding community and policy-makers wishing to adapt competitive research funding strategies to different objectives. It includes a number of policy recommendations, which engage different actors and are derived from the analysis including identification of gaps in the available data and information.
Gørgens, T.; Hyslop, D.R. The Specification of Dynamic Discrete-Time Two-State Panel Data Models. Econometrics 2019, 7(1), 1; https://doi.org/10.3390/econometrics7010001 This paper compares two approaches to analyzing longitudinal discrete-time binary outcomes. Dynamic binary response models focus on state occupancy and typically specify low-order Markovian state dependence. Multi-spell duration models focus on transitions between states and typically allow for state-specific duration dependence. We show that the former implicitly impose strong and testable restrictions on the transition probabilities. In a case study of poverty transitions, we show that these restrictions are severely rejected against the more flexible multi-spell duration models
Dean R. Hyslop & Wilbur Townsend (2018) Earnings Dynamics and Measurement Error in Matched Survey and Administrative Data, Journal of Business & Economic Statistics, DOI: 10.1080/07350015.2018.1514308 This article analyzes earnings dynamics and measurement error using a matched longitudinal sample of individuals’ survey and administrative earnings. In line with previous literature, the reported differences are characterized by both persistent and transitory factors. Estimating a model consistent with past results, survey errors are mean-reverting when administrative reports are assumed correct, but not when this assumption is relaxed. Although most reported earnings variation is true, we conclude that measurement errors dominate observed changes, and that transitory earnings contribute little to overall earnings inequality. The results imply the reliability of matched administrative data should be treated with caution.
Motu Note #33 Sophie Hale and Suzi Kerr. 2019. "Contracts for native forest carbon: perspectives from large-scale emitters" When it comes to offsetting greenhouse gas emissions through forestry, New Zealand could lose valuable opportunities to support native biodiversity if investors see only the forest carbon and not the trees. To enable extensive conversion to forestry to meet New Zealand’s low-emissions targets, landowners may require financial support and certainty. This could be provided through long-term deals for their forests’ carbon; that is, for New Zealand Units (NZUs) within the New Zealand Emissions Trading Scheme (NZ ETS). For buyers, long-term forest carbon deals could provide a valuable hedge for risk around emission unit prices and volumes. This is particularly valuable in the current highly uncertain policy environment where possible large increases in the NZU price would significantly increase their emissions liabilities. A fraction of the NZUs that emitting companies require could be generated in native forestry, incentivised by the range of co-benefits native species deliver. In the New Zealand context, there is merit in identifying the factors that influence a buyer’s willingness to purchase (or pay a premium for) these NZUs derived from native forestry, or for units from small land blocks or Māori-owned land. To explore this, we interviewed representatives of large emitting companies regarding the incentives, drivers, and risks they face when contracting for forest carbon. We found that participants differed in the additional value (if any) they placed on NZUs generated from native species, small land blocks or Māori-owned land, and in the involvement of intermediaries in different deals. Additionally, participants differed in approach, where some adopted a least-cost, cost-competitive approach to meet obligations, and others a “compliance with co-benefits” approach. Participants faced critical issues in determining details and structure of long-term deals, and in managing various risks faced by both parties. To increase future engagement, priorities could include the provision of standardised contracts, the aggregation of land blocks by third parties, an increase in support and reduction of barriers for landowners, and increasing policy certainty. Embracing these opportunities could yield benefits for buyers, landowners and biodiversity, and make important contributions to the just transition to a low-emissions New Zealand.
Motu Note #32 Sandra Cortés-Acosta. 2019 "Carbon farming on Māori land: insights on the decision-making process" Carbon farming, or the provision of CO2 credits, represents an opportunity for Māori landowners to receive carbon credits from reforestation or afforestation. This study explores the nature of the decision-making processes around choosing to go into carbon farming, strengths and weaknesses of the current agreements, and landowners’ opinions on carbon farming programmes, with an emphasis on the Emission Trading Scheme (ETS). Face-to-face, semi-structured interviews were conducted with a small group of Māori landowners who have been involved in the decision-making process on their land in Tairāwhiti, the East Cape of New Zealand. Their experience can be summarised in terms of two central decisions: switching to forestry and joining the ETS. In their experiences, forestry has provided an economic opportunity to access long-term capital. In contrast, carbon farming is a relatively new experience, so is considered a bonus that could provide revenue in the short term, before income from harvest of timber, or potentially in the long term if areas are allowed to regenerate to native forest if the land block is eligible for joining the ETS. Because the carbon cycle and schemes based on this cycle are new concepts in Te Ao Māori or the Māori worldview, there is a need for well-considered engagement and provision of trustworthy and credible information.
Motu Note #31 Jo Hendy, Suzi Kerr, Angela Halliday, Sally Owen, Anne-Gaelle Ausseil, Rob Burton, Kenny Bell, Neil Deans, Blair Dickie, James Hale, Sophie Hale, Wageed Kamish, Jane Kitson, Brett Mullan, Suzanne Rosier, Rata Rodgers, Belinda Storey, Christian Zammit. 2018. "Drought and climate change adaptation: impacts and projections." Future drought may very well be the climate change impact with the most significant effect on our economy (see Westpac, 2018). A recent report by Frame et al. (2018) estimated that the economic losses from droughts between mid-2007 and mid-2017 was $720 million. This exceeds the cost of privately-insured damages from floods over the same period, which are estimated at $120 million. This number is, however likely to under-represent the full economic impact of extreme rainfall as uninsured damages and economics losses are not included. Drought already impacts a wide range of activities in Aotearoa including urban water, primary production, and electricity generation. It also has significant impacts culturally and in our communities. Will climate change simply exacerbate these existing pressures, or might it change the nature of impacts? In 2018, the Deep South National Science Challenge held a dialogue with practitioners and researchers. These participants were from a variety of New Zealand organisations involved in areas where climate-driven changes to drought risk are pertinent for long-term planning. The group’s goal was to better understand drought adaptation issues by mapping current knowledge of drought impacts and identifying knowledge gaps. The aim of this paper is to provide a background to the issues and current research, while capturing the understanding developed by the group regarding the impacts of drought in a changing climate. The group focussed on future drought exacerbated or altered due to climate change and took an people-focussed (anthropocentric) view of the impacts of droughts starting with inspiration from Maslow’s Hierarchy of Needs (Maslow 1943). Existing issues not unique to climate change were deemed outside the scope of this dialogue. These included the debate around allocation (and pricing) of water and emergency responses to drought.
Motu Working Paper 18-02 Sin, Isabelle and Judd Ormsby. 2019 "The settlement experience of Pacific migrants in New Zealand: Insights from LISNZ and the IDI" New Zealand has a long history of migration from the Pacific. Migrants from the Pacific, like all people moving to a new country, face the challenges of finding suitable employment and a place to live, accessing education, and forming new social, professional, and community networks while adapting to differences in culture. Our research uses the Longitudinal Immigration Survey New Zealand (LISNZ) and Statistics New Zealand’s Integrated Data Infrastructure to focus on differences in outcomes between migrants from different Pacific countries who gained residence approval under different visa types. Pacific migrants interviewed in LISNZ faced a number of challenges to becoming successful and settled in New Zealand, including limited English and low education, which may have caught many in low-paying or part-time work and made them particularly vulnerable to economic conditions. Although most reported good health and generally positive non-economic outcomes in New Zealand, some of their outcomes grew worse over their first three years after residence approval. The reasons for these declines are not wholly clear and could be investigated in future research.
Motu Working Paper 18-01 Davies, Benjamin and David C Maré. 2019. "Relatedness, complexity and local growth" We derive a measure of the relatedness between economic activities based on weighted correlations of local employment shares, and use this measure to estimate city and activity complexity. Our approach extends discrete measures used in previous studies by recognising the extent of activities' local over-representation and by adjusting for differences in signal quality between geographic areas with different sizes. We examine the contribution of relatedness and complexity to urban employment growth, using 1981–2013 census data from New Zealand. Complex activities experienced faster employment growth during our period of study, especially in complex cities. However, this growth was not significantly stronger in cities more dense with related activities. Relatedness and complexity appear to be most relevant for analysing how large, complex cities grow, and are less informative for understanding employment dynamics in small, less complex cities.
Motu Working Paper 18-16 Hendy, Jo, Anne-Gaelle Ausseil, Isaac Bain, Élodie Blanc, David Fleming, Joel Gibbs, Alistair Hall, Alexander Herzig, Patrick Kavanagh, Suzi Kerr, Catherine Leining, Laëtitia Leroy, Edmund Lou, Juan Monge, Andy Reisinger, Jim Risk, Tarek Soliman, Adolf Stroombergen, Levente Timar, Tony van der Weerdan, Dominic White and Christian Zammit. 2018. "Land-use modelling in New Zealand: current practice and future needs." New Zealand faces the challenge of using our land in ways that are not only resilient to future pressures and sustain our rural communities but also enhance our natural environment. For the public and private sectors to make robust land-use decisions under uncertainty, high-quality modelling tools and data are essential. The drivers of land-use decisions are complex and models provide a structured methodology for investigating these. While New Zealand is fortunate to have a range of different modelling tools, these have historically been used in a sporadic and ad hoc way, and underlying datasets are deficient in some areas. As the foundation for more strategic development of New Zealand’s modelling capability, this paper profiles the main land-sector and farm- and production-related models and datasets currently applied in New Zealand. It also explores priority policy areas where modelling is needed, such as achieving emission reduction targets; managing freshwater, biodiversity and soil quality; and understanding the distributional impacts of policy options as well as climate change. New Zealand’s modelling capability could be strengthened by collecting and sharing land-use data more effectively; building understanding of underlying relationships informed by primary research; creating more collaborative and transparent processes for applying common datasets, scenarios and assumptions, and conducting peer review; and conducting more integrated modelling across environmental issues. These improvements will require strategic policies and processes for refining model development, providing increased, predictable and sustained funding for modelling activity and underlying data collection and primary research, and strengthening networks across modellers inside and outside of government.
Motu Working Paper 18-15 White, Dominic, Niven Winchester, Martin Atkins, John Ballingall, Simon Coates, Ferran de Miguel Mercader, Suzie Greenhalgh, Andrew Kerr, Suzi Kerr, Jonathan Leaver, Catherine Leining, Juan Monge, James Neale, Andrew Philpott, Vincent Smart, Adolf Stroombergen, and Kiti Suomalainen. 2018. "Energy- and multi-sector modelling of climate change mitigation in New Zealand: current practice and future needs." As New Zealand charts its course toward a low-emissions economy, the quality of energy-sector and multi-sector modelling is becoming increasingly important. This paper outlines why models are useful for answering complex questions, provides a stocktake of energy-sector and multi-sector models used for climate change mitigation modelling in New Zealand, and makes suggestions for improving future modelling work. While New Zealand is fortunate to have a range of different modelling tools, these have historically been used in a sporadic and ad hoc way, and underlying datasets are deficient in some areas. As the foundation for a more strategic development of New Zealand’s modelling capability, this paper profiles some of the energy-sector and multi-sector models and datasets currently applied in New Zealand. New Zealand’s modelling capability could be strengthened by collecting and sharing data more effectively; building understanding of underlying relationships informed by primary research; creating more collaborative and transparent processes for applying common datasets; increasing international collaboration; and conducting more integrated modelling across environmental issues. These improvements will require strategic policies and processes for refining model development; providing increased, predictable and sustained funding for modelling activities, underlying data collection and primary research; and strengthening networks across modellers inside and outside of government. Many of the suggested improvements could be realised by creating an integrated framework for climate change mitigation modelling in New Zealand. This framework would bring together a suite of models and a network of researchers to assess climate change mitigation policies regularly. Core elements of the framework would include a central repository of data, input assumptions and scenarios, and a “dashboard” that synthesises results from different models to allow decision-makers to understand and apply the insights from the models more easily.
18-14 Preston, Kate, David C Maré, Arthur Grimes and Stuart Donovan. 2018. "Amenities and the attractiveness of New Zealand cities." We analyse which factors attract people and firms (and hence jobs) to different settlements across New Zealand. Using theoretically consistent measures derived within the urban economics literature, we compile quality of life and quality of business indicators for 130 ‘cities’ (settlements) from 1976 to 2013, using census rent and wage data. Our analyses both include and exclude the three largest cities (Auckland, Wellington, Christchurch). Places that are attractive to live in tend to be sunny, dry and near water (i.e. the sea or a lake). Since the mid-1990s, attractive places have also had relatively high shares of the workforce engaged in education and (to a lesser extent) health. Attractive places have high employment shares in the food, accommodation, arts and recreation service sectors; however (unlike for education and health) we find no evidence that quality of life is related to changes in employment share for these sectors. The quality of business is highest in larger cities, and this relationship is especially strong when the country’s three largest cities are included in the analysis.
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