Tossing away valuable emigration data

We had confirmation yesterday that departure cards are to be scrapped.    This was flagged by the Prime Minister a few months ago, and I wrote about the issue here.   Since then it appears that there has been no proper public consultative process.

As I noted in March

I’m sure airlines and airport operators hate the cards.  There have been prevous efforts to get rid of them.  They are, nonetheless, a core element of the data collections (in conjunction with arrivals cards) that give us some of the very best immigration data anywhere.  In a country with –  year in, year out – some of the very largest immigration, and emigration, flows anywhere in the advanced world.

We are told by the government that this brings us more into line with other countries

On Sunday, Lees-Galloway said the move would bring New Zealand into line with other countries, few of which had departure cards with the level of detail required by the New Zealand card.

(although even then we appear to overshooting in scrapping the cards completely).

But the statistical and related policy issues New Zealand grapples with are different from those in many other countries, most of whom don’t have big outflows of their own citizens, or big cyclical fluctuations in those flows.     Immigration of non-citizens is managed through the administrative approvals required to get a visa.  But people don’t need government approval to leave again and New Zealanders (of course) are free to come and go without any prior approval from the New Zealand government.

So departure cards captured the intentions of people coming and going.  Those stating that they intend to have changed countries for 12 months or more make up the permanent and long-term migration data that, for decades, has been a major and very timely indicator of what is going on, in a country with some of the largest swings in net migration of any country in the world.   It isn’t as perfect indicator by any means –  very timely ones rarely are – but it has consistently contained valuable information, especially around turning points.   And now the government proposes to scrap this data collection.

The Minister of Customs reckons the cards aren’t necessary

Customs Minister Meka Whaitiri said the cards were no longer needed for their original purpose – to account for all passengers crossing the New Zealand border.

“We have smarter systems now that capture passenger identity information and travel movement records electronically,” she said.

“Information captured by the departure cards is now mainly used for statistical purposes.

“Statistics NZ has developed an alternative way to produce migration and tourism statistics, based on actual movements rather than passengers’ stated intentions on the departure cards.”

I certainly agree that departure cards aren’t needed to capture the total flows, but it is the timely breakdown of that data that has been extensively used for decades.   And the operative word there is “timely”.  The new 12/16 method data –  looking back and seeing how long people were actually here/away – is better for long-term analytical purposes, but it is available only with a 17 month lag, whereas the departure card based data is available within weeks.  That difference matters, and it is worth bearing in mind that 17 months is almost half a parliamentary term.

We are told that Statistics New Zealand has “developed an alternative way to produce” the data, but we’ve seen no details of this, and there has been no consultative document made available for comment.  In  my earlier post I included this quote from SNZ claiming that in future estimates of the PLT breakdown

will be generated through a probabilistic predictive model of traveller type (ie short-term traveller, or long-term migrant), based on available characteristics of travellers. Such a model will provide a provisional estimate of migration, which we can then revise (if required) as sufficient time passes for us to apply the outcomes-based measure.

I commented then

I hope that they plan to rigorously evaluate the accuracy of such models, including when they’ve worked well and when they haven’t, and how well they capture the effects of policy changes, and that they expose their models and evaluation to external scrutiny before scrapping such a valuable source of hard data as the departure card.

But we have seen no sign of such an evaluation at all, and yet in a few months that data that have been used for decades will be discontinued, with  no ability to recreate it in future if the new models that are talked about prove not to have been very good.

Without seeing the models it is hard to comment on where they might go wrong.  But the key point is that statistical models often work fine when past behavioural patterns keep on as they were in the past, and they often fail when behaviour changes.   It is the behavioural changes that are often of most interest to the analyst, and it looks as though there will now be very long lags before we have the data to enable any such changes to be recognised.

I just heard Iain Lees-Galloway claiming on Radio NZ that future statistical information will be improved by scrapping the departure cards.  That seems very unlikely – essentially impossible, because you cannot really know the intentions of travellers other than by asking them, and intentions actually matter in this business.

I could add to the lament around official immigration statistics that there has still been very little progress in making available regular, timely, seasonally adjusted, accessible data from MBIE on visa approvals.  These are major economic and social data for New Zealand, which should be readily available almost instantly, including through SNZ’s Infoshare site.  There is no reason why immigration approvals data should not be at least as readily useable as, say, building approvals data. I know MBIE has a project underway to improve the situation, and make available an immigration data dashboard, but it seems to be moving very slowly –  it must be a year now since MBIE first told me about it, and it is months since the person doing the work invited me to provide comments on a prototype.  It is encouraging that something appears to be in the works, but in the meantime we limp on with inadequate, not user-friendly, administrative data, while the government simply abandons the best timely data we have on what people leaving New Zealand are planning to do.




Census day

It is census day.  I’d probably be filling in my census forms now, except that they haven’t yet arrived.  We wanted paper forms, and I rang to request them within minutes of the initial SNZ letter arriving, with the access codes.  That was 10 days ago now.  So I’m less than impressed.  Doubly so as one of my kids is off at a school camp, and whereas I’d planned to fill out most of her form for her and send it along with her, since the forms haven’t arrived some teacher will presumably be overseeing her completion of the form, including a bunch of quite sensitive information that is simply none of the teacher’s business.

There is an article in the Dominion-Post this morning (“An intrusive, insulting exercise”)  from a journalist attacking the very existence of the census.  I’m torn.  I’m a keen user of some census data.  But I can’t help wondering what business it is of the state to coerce –  under direct threat of prosecution –  much of this information out of people.  As the journalist notes, threats to government data security have become more real.  And I also wonder whether Statistics New Zealand is not increasingly an instrument of a socio-political agenda (note the several pages of defensiveness about the absence of “gender identity” questions – this time).    Glancing through the questions, I’m also struck by the imprecision of several of them (eg under “Which country were you born in?” the third option is “England”, which is barely more of a country than, say, Canterbury or Otago are –  the latter two had their own parliaments rather more recently (1876) than England did (1707?).

The ethnicity question has been in the media in the last few days, with some  people bothered that “Pakeha” isn’t an option.  I guess they have a point.  But what bothered me was something else. Here is the question.


How many Niueans are there in the entire world?   Apparently about 25000.  At the last census there were more than 200000 people in New Zealand born in “England” –  plus others who probably identify as English.   And yet SNZ don’t even list it as one their top 8 options.  It would be interesting to understand why.  I’d probably normally tick the form as “NZ European”, but I think that (when the forms finally arrive) this time I might write down English, Scottish, Northern Irish, and perhaps British as well.  Since SNZ tell us ethnicity is, on their reckoning, self-perceived, the answers won’t (can’t really?) be wrong –  and those places are where my ancestors come from.

There are questions that leave one wondering about the reliability of the results of the census.  Here is a language question


On a form in English, they feel the need to remind us to remember to mark English if we can have a conversation in English?.  Quite how thick do they think respondents are that they need to talk down to us thus?   (And why is it any business of the government whether someone can hold a conversation in, say, Pukapukan or Polish? –  English, Maori, and Sign Language might, arguably, be a different matter.)

Then there is the religion question.


I consistently refuse to answer this question, not because I’m ashamed of my faith – Christian – but because it is the one question I’m lawfully allowed to refuse to answer.   The government and SNZ attempt to market the census on the basis of all the important public policy/spending choices it will inform, but it isn’t clear what decisions they think they will be making on the basis of individual’s declared religion (or lack of it).   And then there is the picky point: few Presbyterians will think of “Presbyterian” as a religion, but as a denomination within Christianity.

And then there is the question that probably bothers me most.


Quite what business is any of this to the government?  Frankly, if I had difficulty washing or dressing, I’d rather take the risk of being prosecuted (or perhaps even lie) than face the humiliation/embarrassment (as many will regard it) of writing that down on some government official’s form.

There are the questions that look like some activist’s request


What marks out cigarettes, in the minds of the bureaucrats who put this together, from pipes or cigars?  What business is it of the government’s.    And if cigarettes, what about alcohol, drugs, or other things people might think of as social vices –  “have you ever requested a single-use plastic bag?” for example.  Then again, perhaps I shouldn’t encourage them.

And, to the very end, the worthy social agenda continues.  The form ends –  the sample on-line firm, not yet having got my forms –  thus.


Actually, if there are blank unused forms, I’d prefer to rip them up, drop in the rubbish bin and see them off to the landfill.  But quite what I do with my rubbish shouldn’t really be any concern of Statistics New Zealand.

For much of the sort of information in the questions I’ve highlighted, it is hard to see a legitimate public policy interest in the information (coerced as you’ll recall) and also hard not to think that to the extent that there is interest in the issues in some quarters, reasonable steers could not be obtained much more cheaply, and non-coercively, through the use of well-designed voluntary surveys, undertaken at the expense of those interested in the data, and without the privacy concerns regarding the provision of so much joined-up data in one place to public servants.


Please improve immigration data, not undermine it

On her visit to Australia, the Prime Minister has been quoted as suggesting that departure cards might soon be discontinued, and that she will be pursuing her Customs and Statistics ministers on the matter.

I’m sure airlines and airport operators hate the cards.  There have been prevous efforts to get rid of them.  They are, nonetheless, a core element of the data collections (in conjunction with arrivals cards) that give us some of the very best immigration data anywhere.  In a country with –  year in, year out – some of the very largest immigration, and emigration, flows anywhere in the advanced world.

I wrote about this a few months ago when, under the previous government, Statistics New Zealand publicised the possibility/likelihood of departure cards being discontinued.  At the time, SNZ suggested that

“In the near future, the outcomes-based ‘12/16-month rule’ is expected to become a key component in how we determine the number of migrants in New Zealand.”

The “12/16 data” are the new series of permanent and long-term movements derived by lining up, using passport details, people coming and going, and waiting until more than a year after the initial movement to see if the movement loooks permanent or long-term.    It is all very interesting – I’ve praised SNZ for putting the collection in place –  and provides a more accurate measure of actual long-term comings and goings than the (stated intentions based) arrival and departure card.   But it is only available with a very long lag  (ie more than 16 months), whereas the existing PLT data are available monthly, with a few weeks lag (and in principle could be produced even more frequently).

I’m reproducing here the concerns I expressed in September

I’ve explained here previously why the resulting PLT data has its limitations.   It isn’t a good basis to use to look at immigration policy itself.  Approvals data from MBIE is better for those purposes –  and would be better still if they made the information available in an accessible format on a more timely basis.     And the PLT data are based on self-reported intentions, and intentions aren’t always what people end up doing.  Some people think they are leaving permanently, and are back six months later, and vice versa..   But intentions data isn’t nothing either  (just as business surveys capture intentions/expectations and things don’t always turn out as they expect).    The patterns –  and especially the cyclical patterns, the turning points –  in the PLT data tend to match those in the (lagged) 12/16 data quite closely.

There are quite enough gaps (and long lags) in New Zealand economic data as it is –  monthly CPIs, monthly manufacturing data, quarterly income measure of GDP just for starters –  that I’m just stagggered that key economic agencies are apparently willing to let SNZ/Customs go ahead and consider dropping departure (and arrival?) cards.  Where are Treasury and the Reserve Bank on this?

How, specifically, does it matter?   Without departure or arrival cards we would, of course, still have immigration approvals data for most non-citizens (other than Australians).  In principle, they could be published weekly or monthly with just a day or two’s lag, and be available in quite accessible formats.  Since approvals lead actual arrivals, there is certainly useful information in those approvals numbers (it is just that they aren’t made easily available now).

We could presumably also have data on the total number of people crossing the border (gross and net) from passport scanning.   I’m not aware that those numbers are published at present, but they could be.  And presumably they could be broken down by nationality (or at least by the passport the person happened to be travelling on).    That would be useful –  relative to having no arrivals or departures data –  but not very.   If you look at total net arrivals or departures (or net) data it is enormously volatile, and thrown around things like Lions tours –  in other words, holidaymaker and other short-term visitor numbers swamp movements of migrants.   Using that data alone, we’d have no ability to pick turning points for some considerable time after the turn had already happened.

The gaps would be particularly serious for the movement of New Zealanders, and more than half the variability in the 12/16 measure of net migration has arisen from fluctuations in the movements of New Zealanders.  We would have no secure way of knowing if someone leaving was planning to be off for a week’s holiday, or intending to stay away for ever.  The 12/16 method would eventually tell us what they did –  but there is a lag of almost 18 months on the availability of that information.    And even if the new plan involves keeping arrival cards and only getting rid of departure cards, most of the variability in New Zealanders’ migration movements is in the numbers leaving, not the numbers arriving.

Less importantly, without the departure cards we would seem likely to lose the ability to analyse migration (including reflows outwards by migrants who become NZ citizens) by the birthplace of the migrant.

Perhaps someone has done a robust cost-benefit analysis on getting rid of departure (and arrival?) cards.  If so, I would be keen to see it, and particularly keen to see how the relevant officials have factored in the loss of some of world’s best migration data to macroeconomic monitoring and forecasting, in a country with some of the most volatile immigration flows in the advanced world (and not a great track record of getting monetary policy, or housing markets, right as it is).  And even if one sets aside the macroeconomic analysts interests, it is not as if net migration numbers are one of those issues of no political salience at all.  Put an 18 month lag on decent data, and you risk not silencing debate – which some might wish for – but allowing all sorts of misconceptions and concerns to flourish, which no one will be in a position to allay.  It would, frankly, seem crazy.    Immigration has a economic and political salience here which it might not have in a country with land borders and small permanent inflows/outflows.

Frankly, it looks like a pretty irresponsible proposal.   The departure cards provide the only information on what New Zealanders are doing, and the comings and goings of New Zealanders are a big part of the PLT migration story (and aren’t, of course, under government control).

And in case anyone thought the PLT numbers were simply flaky measures, with no information

…here are the total net flows on the two measures [12/16 in blue, PLT in orange]


They don’t match up perfectly –  one wouldn’t expect them to, and there is information even in the differences (eg what led people to change their plans) –  but no analyst would happily give up a series that provided a 17 month lead this (relatively) good on the 12/16 series.

Turning points matter a lot for macroeconomic analysis and monitoring, and the turning points in the two series are very similar.

The claim from Statistics New Zealand is that they can fill the gap with estimates that

will be generated through a probabilistic predictive model of traveller type (ie short-term traveller, or long-term migrant), based on available characteristics of travellers. Such a model will provide a provisional estimate of migration, which we can then revise (if required) as sufficient time passes for us to apply the outcomes-based measure.

I hope that they plan to rigorously evaluate the accuracy of such models, including when they’ve worked well and when they haven’t, and how well they capture the effects of policy changes, and that they expose their models and evaluation to external scrutiny before scrapping such a valuable source of hard data as the departure card.

And talking of data gaps, I’ve also written here before about the very long lags in MBIE making available, in readily usable form, the summary administrative data on actual immigration approvals (and estimates of the stock of migrants).   Some of the data you can get yourself, if you don’t mind manipulating spreadsheets that are hundreds of thousands of lines long, but for most people, for practical purposes, the data are really only available annually, and typically with quite a long lag.    That is really inexcusable.  Like it or not, immigration policy is a major instrument of government economic and social policy, and approvals data (and associated stock estimates) are a valuable part of informing the public debate.  Information is almost always better than no information.

[UPDATE: A reader highlights that not even the spreadsheets are currently available.]

MBIE publishes the summary results, and accessible tabular data, in their annual Migration Trends and Outlook publication. In many respects, it is a very useful publication, even if (a) the data are only annual (whereas, say, building approvals data are available monthly), and (b) the publication has a minimum lag of 4 to 5 months (in other words, data for the full year to June 2016 was only published in late November 2016).  That isn’t remotely good enough, especially for administrative data.  Neither MBIE nor SNZ has to collect the data –  it all sits in MBIE’s own systems, generated every single working day.  There is no obvious reason why the data  – all the summary data (number of approvals in each category, occupation, age, sex, country of origin etc) –  couldn’t be made accessibly available monthly within a few days of the end of each month.

I’ve made these criticisms previously.  And that was when Migration Trends and Outlook  was coming out on its normal slow timetable (a 5 to 17 month lag).   But go to the MBIE website looking for the 2016/17 publication –  in March 2018 –  and it still hasn’t been published, more than eight months after the end of the year in question, 20 months after the start of the period to which the data would releate.

Some readers might be inclined to suspect MBIE of some deliberate strategy to keep the information from the public.  I’m not.  That is not only because I’m not naturally a conspiracy theorist, and have had plenty experience of the failures of bureaucracy. It is also because a few months ago I was invited to a meeting by an MBIE official who was part of a team working on improving the Migration Trends and Outlook publication, looking for my comments/ideas on data, immigration research etc  The official seemed quite genuine, and enthusiastically told me of the efforts MBIE was putting in to improving the publications, and (if I recall rightly) the timeliness of the data (even while stressing that it was quite hard and there were “systemss issues”.  That meeting last year would have been before the usual publication data of the Migration Trends and Outlook publication, so I came away from the meeting quite encouraged.   I’m still quite willing to believe that MBIE has the project in hand, but in the meantime……where is the 2016/17 data?  It is now March 2018.

Revising the unemployment rate

Last week, Statistics New Zealand published the backdated results from their revamp of the HLFS.  It didn’t get very much coverage, apart perhaps from the headline result, in which the estimate for the unemployment rate for the March 2016 quarter is now 5.2 per cent, down from 5.7 per cent previously.

The change arises mostly because Statistics New Zealand has reclassified those searching for a job by checking websites as not unemployed –  to be “unemployed” for these statistical purposes one has to be out of work, available to start work, and actively seeking work.  Previously, those using just newspaper adverts were classified as  passively seeking work, while people using other search mechanisms were treated as actively seeking work, and thus included with the officially unemployed.  20 years ago web-based advertising  was either non-existent or almost relevant, and now to a large extent it dominates the market.  Fortunately, SNZ had enough data to produce backdated estimates on the new definition back to 2007 (any differences prior to that appear to be very small).

The change brings the New Zealand definition of unemployment into line with the recommendations of the ILO, and seems sensible on its own merits –  there isn’t any good reason to treat newspaper and web searches differently for these purposes.

The headline difference in the unemployment rate is quite large.  But all the gap opened up some years ago.

hlfs revisions

And here is the difference in the two series.

hlfs revisions 2

So, in essence, the data for the last six years aren’t materially affected by the revision and the new methodology: the new series is lower than the old series throughout, but by a fairly constant margin.  The unemployment rate didn’t fall much from the recessionary peak on the old methodology and didn’t fall much on the new methodology.  For example, on the old method the unemployment rate was 6.1 per cent in December 2013, just before the ill-fated tightening cycle began.  Since then, on the old methodology the unemployment rate has fallen by 0.4 percentage points.  On the new methodology, it was 5.7 per cent in December 2o13, and has fallen by 0.5 percentage points to 5.2 per cent.

But the new series does throw up a couple of questions.  The first is about international comparability.  As I noted, the SNZ release noted that the new methodology was more consistent with ILO recommendations.  That is good on its own terms.  But I was curious as to whether other countries were following ILO recommendations (yet) in this area.  I’ve known of other cases –  household debt was an example –  where we improved New Zealand data, drawing more into line with international standards, only to find that the international comparability wasn’t really improved because most other countries we were interested in weren’t yet following international guidelines.

So I asked SNZ whether they had any sense of how other countries were doing on this particular issue.   I got a full and prompt response from the manager of their Labour and Income Statistics area.   The short answer was that some countries seem to comply in this area, and others don’t.  Perhaps fortunately for us, both Australia and the US appear to treat looking at (newspaper and online) adverts the same way we do –  passively seeking work, rather than actively seeking work.    But, on the other hand, Eurostat treats looking at adverts as actively seeking work.  It is a reminder that simple levels comparisons of unemployment rates across countries often doesn’t involve (strictly) comparing apples with apples.  Comparing changes within over time within individual countries should still be valid.

The other question is how to think about the normal/natural/non-inflationary rate of unemployment.  At 5.2 per cent, our unemployment rate is still a long way above the pre-recessionary lows  (3.3 per cent) –  by contrast in the US and the UK, the recessionary increase in the unemployment rate has been fully unwound.  But the gap between 5.2 per cent and 3.3 per cent is materially less than that between 5.7 per cent and 3.4 per cent (on the old methodology).  Since most everyone thought that the unemployment rate prior to the recession was below the natural or non-inflationary level, does this new data raise questions as to whether the current unemployment rate might be not far from the NAIRU?

I don’t think there is any easy answer to that question.  Only time will tell.  As happened in the US and the UK we –  and the Reserve Bank –  need to see what happens, to wage and price inflation, as the unemployment rate gets down to the mid to low 4s (one hopes the Reserve Bank allows us the chance to see).  But don’t rule out the possibility that the NAIRU itself has been falling –  as it was widely perceived to have done in both the US and New Zealand in the 1990s and 2000s.

One reason why it might fall is the growing importance of old people in the labour market. Of all the OECD countries, New Zealand has seen the largest increase in the participation rate of older people (65+) in the 20 years since 1995 –  rising from 6 per cent to 21 per cent. .And we now have the fifth highest participation rate for the over 65s among the OECD countries.

over 65 participation ratesAnd the unemployment rate among older people is very low indeed   – before the recession and now both around 1.5 per cent.  That makes sense –  older people have New Zealand Superannuation to fall back on, with no work test, so there is typically no urgency to find another job (to be “actively seeking”).  But it is a very different –  and less cyclical –  unemployment rate than that for the rest of the workforce.

And here is the share of the over 65s in the labour force.  Even just over the last decade, the share has increased from 2.6 per cent to 5.8 per cent of the total labour force.

over 65s share

With such a low unemployment rate among this (rapidly growing) part of the workforce, the overall unemployment rate (actual and natural) should be trending lower over time, all else equal.

How material  this proves to be remains to be seen.  But a line I often used to use in debates about unemployment is that if everyone spent a year officially unemployed (available and actively seeking work) in a 45 year working life, that would produce an unemployment rate of only around 2.2 per cent.  For many people, a full year officially unemployed is a very long time –  more than a few people are probably like me, having spent over 30 years in the labour force and not a day officially unemployed.  We need to be guided constantly by the data, but we shouldn’t rule out the possibility that the NAIRU could keep falling quite a long way (and perhaps especially while the NZS age remains at 65).

This is my last post for a week or so.  The school holidays start tomorrow and we’ll be away for a while. I should be back writing here on 18 July –  I might even still find something to say about the speech on housing (and housing finance) Deputy Governor Grant Spencer is due to deliver this evening.




A bouquet for Statistics New Zealand

(and some questions as well).

I got home at lunchtime after a couple of hours out with the kids to find a very pleasant surprise.

Following the kerfuffle last week about the Reserve Bank’s leak inquiry, and the discontinuation of the Bank’s lock-ups for media and analysts, someone reminded me that not just Treasury but also Statistics New Zealand holds regular lock-ups involving market-sensitive macroeconomic information.   Statistics New Zealand runs lock-ups

for media and market commentators for Gross Domestic Product, Balance of Payments and International Investment Position, Consumers Price Index, and Labour Market Statistics releases.

I wondered (a) what procedures Treasury and Statistics New Zealand used,  and (b) whether either organisation had changed their procedures in light of the Reserve Bank’s leak inquiry and subsequent decision to discontinue lock-ups.

So last weekend I logged OIA requests with each organization, and assumed I’d hear something in a few weeks time.

But Statistics New Zealand responded this morning (in due course, their full response will be here).  Often enough, blanket refusals take 20 working days or more, but here was a department offering a prompt, clear and helpful reply, and offering to answer any follow-up questions.

Here are the SNZ procedures

Prior to the commencement of a media conference, Statistics NZ requires attendees to sign in and surrender their cell phones. In addition, Statistics NZ displays the following media conference rules for attendees to abide by:

  • the media conference is held as a ‘lock-up’
  • once you have entered the room, you must not leave until 10:45am when the embargo is lifted
  • please sign in, turn off your mobile phones, including smartphones, and put them in the compartment at the conference room entrance
  • laptop external wireless communication devices must be placed beside the laptop on the media room table for the duration of the media conference, and cannot be connected to the computer until the embargo is lifted
  • laptops or other devices that have internal wireless network capability must not connect or transmit until the embargo has been lifted
  • we reserve the right to inspect devices to ensure that internal wireless capability is turned off.

Statistics NZ staff are happy to assist you with any questions about these guidelines.

 Note: Before the media conference starts, attendees are permitted to call their office, from Statistics NZ provided phones, to set up redial capability for use at 10:45am.

And here is the response as to whether they have made any changes or reviewed their procedures

Statistics NZ has not undertaken any reviews or made any changes to the department’s policy for media conferences following the Official Cash Rate leak at the Reserve Bank of New Zealand and the subsequent Deloitte report into that leak released last week.

Unfortunately, Statistics New Zealand seems still to be relying, in effect, on trust  (in much the same way the Reserve Bank was doing).   But the headline statistics that they hold lock-ups for are highly market-sensitive, and will not infrequently move markets more than an OCR announcement will (as one would expect; it is the same data the Reserve Bank uses).  There is no sign of, say, any jamming technology (or other technical means) being used, to buttress the role of trust.

Statistics New Zealand notes that

While Statistics NZ has never had a breach, if that trust is abused and an embargo is broken, offenders and their organisation would be barred from attending future media conferences.

Unfortunately, that was probably the sort of discipline/incentive the Reserve Bank was implicitly relying on as well.

As I’ve argued previously, the case for pre-release lock-ups for monetary policy announcements is weak (with the possible exception of a highly secure 10 minute lock-up for core financial journalists, with no additional briefings –  something like the model the US Federal Reserve apparently uses).  Is Statistics New Zealand that different?  There is, obviously, no policy message SNZ is trying to put across with its releases, and so no risks of different messages getting to different people.  But the security risks are the same.  Perhaps it is simply more efficient to have everyone in the same room, to clarify key technical points, but couldn’t the same end be achieved –  on a more competitively neutral basis (to analysts based abroad, say) –  by a dial-in (even webcast) conference call held a bit later on the day of the release?

Anyway, the point of this post was to praise Statistics New Zealand for its timely (“as soon as reasonably practicable”) response to an OIA request.    Quite what approach Statistics New Zealand should take in future is a matter for them, but I would encourage them to think again about the risks, and about alternative –  perhaps preferable –  models for helping to ensure that users can get whatever technical insight SNZ can offer into the numbers it releases.    Breaches may never have happened, but when one does happen –  and (by accident or intent) with current systems  it must be a matter of time – it can suddenly get extremely uncomfortable.

UPDATE: For those with a taste for obscure historical episodes, chapter 1 of this document –  linked to by a commenter – is well worth a read on the great data leak of 1905.



Unprecedented…in a sample of four

The Reserve Bank had an interesting brief issue of the Bulletin out yesterday, reporting the results of some fairly straightforward data analysis as to how house prices (more accurately, house plus land prices) have behaved over the last fifty years or so, and how prices in Auckland relative to those in other parts of the country have behaved going back a few decades.  It is almost wholly a descriptive piece, offering no views on why things happened as they did, and little on what those patterns might mean.

The author –  Liz Kendall –  has done to work to construct a quarterly series for each TLA and a range of regional indices, using QVNZ data.  It would be nice to have those indices generally available, but perhaps restrictions on the use of the QV data precluded that?

The author identifies six distinct upswings in real national house (+land) prices since 1965, and as she notes the recent one has been relatively muted (for the country as a whole) –  despite all the fevered talk of low interest rates driving prices higher, ignoring the fact that interest rates are low for a reason (weak demand at any higher rates).

There wasn’t much of a upward trend in real New Zealand house prices, as far as we can tell, until the last 15 or 20 years.

rb housing 2

There was a huge boom in the early 1970s, as some combination of very low real interest rates and very rapid inward migration drove prices up.  But that increase was fully reversed over the following few years as credit conditions tightened, real incomes came under pressure, and significant net outward migration relieved pressure on the housing (house+land) stock.  The lack of any strong trend is consistent with what we see in the advanced countries that have a much richer longer collection of historical data –  including Australia and the United States.

Kendall illustrates that house prices in Auckland have not always been that highly correlated with those in the rest of the country.  There is clearly a common element to house prices in the country as a whole, but there are times when each region- including Auckland – “does its own thing”.  For example, in the 2002 to 2007 boom real house prices rose by materially less in Auckland than they did in the rest of the country (taken together).  And in the last three or four years, Auckland prices have risen much faster than those in the rest of the country.

The punchline of the article appears to be this chart

RB housing 1

For the period since 1981 –   only 35 years –  it shows the ratio between Auckland house+land prices and those in the rest of New Zealand, and a moving average trend in this ratio.  The trend has no economic significance –  it simply smooths through the ups and downs in the actual data, and the more recent observations might end up being quite materially revised (up or down) as new data emerge (there are always “end point problems” with these sorts of filters).  The ratio is currently 22 per cent above this particular trend line, but when we look back 10 years hence who knows how large we will estimate that gap to have been.

I had just a few other thoughts on the article:

First, it was a shame that the authors did not look at Christchurch separately.    They look at an entity called “Greater Wellington” (Wellington, Upper and Lower Hutt, Porirua and Kapiti) but it is puzzling that they don’t even break Christchurch (an urban area of a similar population) out separately (just bunching it with Nelson, Dunedin and Invercargill), let alone look at a combined “Greater Christchurch” entity (Christchurch, Selwyn and Waimakariri).  At least in recent years, it has only made sense to think of the three TLAs together –  and price behaviour in that area has been distinctively different from, say, the rest of the South Island).

Second, it might have been interesting to see whether the differences between prices in other TLAs and the rest of New Zealand (perhaps excluding Auckland) were similar to, or different than, the pattern we observe in Auckland, including whether those patterns have been changing over the relatively short period under study.

Third, I would go easy on the word “unprecedented”.  In a short article, it is stressed several times that the gap between the increase in Auckland house (+land) prices and the increase in prices elsewhere in the country is “unprecedented”.  But they have regional data only since 1981, and in that period there have been a grand total of four upswings.  It is true that there is no precedent in the data, but there isn’t much data.

Relatedly, the article highlights how ill-served New Zealand is with historical economic and financial data.  That isn’t the responsibility of the Reserve Bank –  largely a policy and operational agency –  but it is a limitation that all users face.  Between the continued underinvestment in historical official statistics, and the lack of academic economists working on New Zealand economic history, and doing the leg-work to develop longer-run analytical series (as has been done for house prices in Australia, the US and various other countries), we have a relatively poor sense of what is normal or abnormal.  For example, it would be interested to know whether similar divergences occurred in the early 70s, in the post WW2 house (+land) price boom (when wartime controls were lifted), to be able to see what sort of regional divergences occurred during the Great Depression, and to be able to understand 19th century regional house price shocks (for example, the impact of the gold rushes on Dunedin prices, or of the land wars on Auckland prices).

The subtext in the Reserve Bank article is that what goes up comes down again.  In this article, it isn’t a particularly powerful point (and, in fairness the article doesn’t make much of it directly), since there will always be times when one region or another (even the largest) lags behind house price inflation in the rest of the country.  But there is no natural equilibrium  relationship between Auckland prices and those in the rest of the country –  as experience in the US demonstrates, it is mostly a matter of policy choices.  With weaker immigration and more liberal land-use policy around Auckland, real Auckland house+ land prices could be much lower absolutely, and relative to the rest of the country than they have been in recent years.  Many cities much bigger than Auckland in the US have house prices much cheaper, relative to surrounding areas, than Auckland does (I stayed recently with some friends in a small college city in the middle of the US where house prices were higher than those in the nearest, fairly prosperous, city of a million or more).

Finally, on the housing sector, SNZ released building consent data yesterday, completing the data for 2015.  The authors of the press release pointed out that the number of residential consents was the ninth highest ever –  which isn’t very impressive, since most macro series reach their highest or maybe second highest level each and every year.  What wasn’t pointed out was the way New Zealand’s population has increased –  not only is stock of people living here much higher than it was in previous housing booms, but the population increase over the last year or so has been larger –  even in percentage terms –  than at any time for decades.  Unfortunately, we don’t have an official population series that goes back prior to 1991, but using one of those from the international databases, here are residential building permits per capita since the series the mid 1960s.

residential building permits per capita


Last year’s building permits per capita were only just back to the average for the last 35 or so years –  even though the fast rate of population growth might normally have suggested, in a less regulatorily-impeded market, that consents per capita might have been considerably higher than the average over that period.

Statistics NZ talking up the data again

A while ago, I noted the tendency apparent in Statistics New Zealand press releases to “accentuate the positive” (at least as staff seem to see it) in any data releases they were making.

In the last few years, Statistics New Zealand has taken to “spinning” its statistical releases.  I use the term advisedly.  I’m sure all the numbers are reported entirely accurately, but my issue is more with which numbers, and which comparisons, they choose to highlight.  Almost always, they seem to emphasise what staff (and management?) presumably regard as good news.  Is that quite the job of a national statistics agency?  Personally, I value good quality data, and technical explanations for apparent oddities –  and the assurance that SNZ has no agenda other than good quality data, adequately explained.  There are plenty of others out there (backbenchers in parliamentary questions?) to highlight the good, or not so good.

I was almost moved to comment yesterday when the business demography data were released, but had better things to do with my time.  But there was another, rather more egregious, example this morning, when the building consents release was headed up “Home building accelerates in the north”, even though the data were showing a second successive five per cent monthly seasonally adjusted fall for the country as a whole.   Of course, those falls came after the rather odd 20 per cent increase in the month of July.

I’m not sure why Statistics New Zealand seems to regard it as appropriate to spin their releases this way.  Having thought about it a little more, I wonder if the managers and deputy secretaries have KPIs for the amount of media coverage their releases get.  If so, there might be an incentive to run a strong story line in the release headline (or the SNZ text).  It could be downbeat stories as well as upbeat ones – either might help meet these media targets.  But downbeat stories prompted by SNZ headlines would be more likely to prompt complaints from ministers’ offices, and all public servants want as few of those as possible.

Is that the answer?  Perhaps not, but there must be something behind it.

And I’m not suggesting they should set out to accentuate the negative – again there are plenty of other people to do that.  But they are a statistics agency, whose integrity and impartiality we rely on.  Perhaps this is boring economist speak, but what would have been wrong with a heading this morning “September building consents data released”, and an opening sentence that read “the number of residential building consents fell in September for the second successive month, following a very large increase in July.  Consents in Auckland appear to be growing more rapidly than those in most of the rest of the country.”?

How about leaving the storytelling to journalists, politicians, economists….and even bloggers.

UPDATE: A glance at this month’s ABS releases suggests they mostly do these things better.

Statistics New Zealand and the “population ponzi”

In the last few years, Statistics New Zealand has taken to “spinning” its statistical releases.  I use the term advisedly.  I’m sure all the numbers are reported entirely accurately, but my issue is more with which numbers, and which comparisons, they choose to highlight.  Almost always, they seem to emphasise what staff (and management?) presumably regard as good news.  Is that quite the job of a national statistics agency?  Personally, I value good quality data, and technical explanations for apparent oddities –  and the assurance that SNZ has no agenda other than good quality data, adequately explained.  There are plenty of others out there (backbenchers in parliamentary questions?) to highlight the good, or not so good.

The latest example came this morning, with the population data release below.

It might be mildly interesting to know that population growth in the last year outstripped that even in  –  much richer and more successful –  Australia.  But SNZ seems to think this is “a good thing” –  if anything reporting it as something of a race.   Fortunately, we aren’t  early 20th century France needing to stress about the growing military threat from a larger neighbouring country’s faster population growth.  And if we want to celebrate success, I’d suggest doing it using measures of per capita living standards (however you want to define them) or even productivity.  But leave it to the commentators and politicians to do the cheerleading.

Just to illustrate the apparent “good news bias”, SNZ put another release this morning.  Real retail sales rose only 0.1 per cent in the June quarter.  But there was no mention of what happened in Australia.  I checked, and in Australia the comparable series rose by 0.8 per cent in June quarter.  In per capita terms, I guess that gap is a little larger still.

SNZ does a pretty good job with the inadequate resources they have, but I’d urge then to leave the editorialising to journalists, commentators, politicians and the like.

Population growth outpaces Australia’s – Media release

14 August 2015

New Zealand’s population is growing at its fastest rate for over a decade, and is exceeding Australia’s growth rate, according to new estimates released by Statistics New Zealand today.

The country’s population grew by 86,900 people, or 1.9 percent, in the year to 30 June 2015. This came from net migration (arrivals minus departures) of 58,300, and natural increase (births minus deaths) of 28,700. New Zealand’s estimated resident population was 4.6 million at 30 June 2015. The latest figures
show Australia’s population growing at 1.4 percent a year.

“The last time New Zealand’s population grew at this rate was in 2003 when the increase was 2 percent,” population statistics manager Vina Cullum said. “The last time New Zealand’s growth rate exceeded Australia’s was 2004.”