Time to call this one

John Quiggin50 Comments

I don’t have much of a reputation for accurate election predictions[1],[2], but I’m going to call this one for Labor. Short of something unexpected and uncontrollable by either side, I can’t see the Libs pulling this out of the fire. I think it’s just a matter of waiting out the remaining month.

[1] A week out from the 2004 election, I thought the position was in Labor’s favor, and even on the day I thought the odds close to 50-50, so I wouldn’t base large-scale betting-market investments on my judgement if I were you.

[2] By contrast, I think I’ve called the Iraq war pretty well, but that’s another story.

Books I’ve been reading

John Quiggin4 Comments

As well as Dance to the Music of Time, there’s Bob Burton’s Inside Spin a well-researched look at the operations of PR in Australia. As well as standard PR and Astroturf operations, there’s plenty of interesting material on think tanks like CIS and IPA. And I’m also reading To Firmer Ground edited by John Langmore, which provides a lot of useful policy suggestions for a social-democratic government. Sadly, the decision to match Howard’s tax cuts has closed off much of the room for manoeuvre available to Labor over the next three years, assuming they get in.

Dead cats

John Quiggin53 Comments

The government got its bounce last week, but it looks to have been of the dead cat variety, with the latest Newspoll (taken before the debate) showing Labor ahead 58-42 on 2PP. Of course, the usual warnings about margin of error apply to both this poll and the previous one. There’s nothing to suggest, with any certainty, that there has been any movement away from the average of 56-44 that’s prevailed all year.

The big problem is the perception that the government has fired off all its big guns and achieved nothing. We’re already seeing backdowns on a bunch of issues (Turnbull on nuclear power for example), but they’ll need more than this, or another bounce, to stave off the view that disaster is inevitable. it might not be too late for Howard to pull back a few points by ratifying Kyoto, but he needs to do something quickly.

Five more weeks (Groan!)

John Quiggin29 Comments

Now the one and only debate is over, and both sides have launched the bulk of their policies (there are presumably some last-minute goodies, but the big money has been spent), what are we going to do for the next five weeks? The Policy Speeches could normally be relied on to inject at least some interest, but not when the policies get announced in the first week.

After the endless pre-campaign, five more weeks of pointless stumping about will have people turning off in droves, I imagine. If it weren’t for compulsory voting, I suspect we’d see a big drop in turnout. Normally, boredom is good for the incumbents, but I’m not sure how it will play out this time.
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Life imitates art

John Quiggin10 Comments

I thought, at first that he worked far harder than most of the men I knew. Later, I came to doubt this, finding that Quiggin’s work was something to be discussed rather than tackled and that what he really enjoyed was drinking cups of coffee at odd times of day

Anthony Powell, in A Dance to the Music of Time. Any of my co-authors will recognise this much of the picture, at least.

The distributional effects of the tax cuts

John Quiggin6 Comments

All the econobloggers have been waiting for someone else to dive into the analysis of the tax policies offered by the government and opposition. Finally, Andrew Leigh has got sick of waiting and produced a distributional analysis. Bottom line: as you would expect, only marginal differences, except at the top percentile of the income distribution. Labor’s education credit makes its policy very slightly more egalitarian.

I’ve been meaning to work through the MYEFO and talk about the fiscal soundness or otherwise of tax cuts on this scale, and I’ll try to get to this next week.

Coral Reef Futures Forum

John Quiggin16 Comments

I spent the last couple of days in Canberra at the Coral Reef Futures Forum, as part of my new Federation Fellowship is to look at economic approaches to management of the Great Barrier Reef. As one of the speakers said, a lot of the talks had people staring at their shoes in gloom, though the tone got a little more positive towards the end. I’m an optimist on ecological issues which is fortunate, because when you look at the threats facing coral reefs, you need a lot of optimism. Looking at historical data, even the GBR, which is much better managed than most reef systems is significantly degraded relative to 100 years ago, and a large proportion of reefs are at or near the point of no return, thanks to overfishing, destructive fishing methods and marine pollution. When you add regular bleaching due to climate change, and also acidification due to higher CO2 levels, the chances of saving much of the world’s coral reef systems do not look too good.

The most hopeful view is that, if we can fix the local threats like overfishing and poor water quality, the resulting increase in resilience (part of my project is to develop a more rigorous understanding of this popular buzzword) will offset moderate global warming, so that if we can stabilise the climate (an increase of no more than 2 degrees) we might save at least some reef systems.
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Overworked?

John Quiggin17 Comments

Following up my post on consumption and living standards in the US, there was a fair bit of discussion at CT of what’s been happening to leisure. Juliet Schor and others have argued that the long-term trend towards reduced hours of work and more leisure reversed some time in the 1970s, and people have been working harder since then. A study by Aguair and Hurst (the final QJE article is subscription-only, but I found a preliminary version here) has been widely quoted as proving the opposite (here, for example, by Tyler Cowen) and the abstract seems to support this interpretation, saying “We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked between 1965 and 2003.”

However the data periods don’t exactly match up. It turns out that, using any of the definitions of leisure considered by Aguair and Hurst, the majority of the increase in leisure time took place between 1965 and 1975, and most measures show little change since 1985.

There’s an important gender/family dimension too. On Aguair and Hurst measures 1 and 2 (which exclude child care), leisure time for women peaked in 1985 and has declined since then, while leisure time for men has been pretty much stationary.

So that readers can make their own comparisons, I’ve extracted the relevant table, which is over the fold. I’d say it matches Schor’s story (increasing leisure until the late 70s followed by a decline) at least as well as that suggested by the authors (dramatic long-term increases in leisure)

There’s lots more data in the Aguiar and Hirst paper and one point worth noting is that the trend in the distribution of leisure time is the opposite of that in income. High income, high education people have experienced a significant decline in leisure relative to those with low income and low education. That somewhat offsets the growth in inequality I’ve been talking about. Also, combined with the gender pattern I already mentioned, it almost certainly means that educated women have, on average, less leisure than in the late 1970s.
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Disruptive marketing …

John Quiggin55 Comments

… is one of those buzzphrases that is in the air in business schools, and since I’m located right next to the business school here at UQ I tend to be exposed to them.

Economists have their own buzzphrases and are not usually inclined to adopt those of marketing, but I must say this term seems apposite to Howard’s approach to the campaign. Starting from behind (but with the notional advantage of incumbency) he’s making up new rules and then demanding that Rudd adhere to them.

On tax, for example, the standard occasion to release what will presumably be the biggest single policy initiative of the campaign would be the policy speech (hence the name). Howard released his on the first day, then demanded that Rudd follow suit. Similarly, Howard has proposed a totally new format for a debate, effectively killing off the debate as it’s been understood, and is now trying the “empty chair” ploy on Rudd, saying he’ll go ahead with or without him.

It makes a certain kind of sense, but the obvious thing for the market leader (there I go again!) to do is to ignore it.,