Friday's Top 10: Jason Krupp on Len Brown's politics trumping economics, the taxi cartel, rude retailers, the GFC's birth rate impact, Dilbert and more

Today's Top 10 is a guest post from Jason Krupp, a research fellow at the the New Zealand Initiative.

As always, we welcome your additions in the comment stream below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 10s here.

1. Brown’s politics trumps economics
Auckland Mayor Len Brown has dismissed a report by the Institute of Economic Research, which called for the city’s urban boundaries to expand by 22% if it want to encourage growth.

His rejection appears to be on the grounds that the researchers didn’t consult the council.

This correspondent is sure the dismissal is based on solid research, and not because it would put Brown’s $1.2 million lifestyle block in the path the bulldozers.

"Auckland is going to get built a bit up and a bit out, that's the unitary plan, that's what the Auckland plan says," Brown said. "We know that we need to get some density of development because the cost of urban sprawl is quantum, it's a lot more than the cost of building up. It is old school and I'm rejecting what I've heard of it so far."

2. My way or the highway on bursary?
Given the Auckland Mayor’s dim view of NZIER’s latest research report, it is surprising to see that the council is sponsoring a postgraduate scholarship in urban economics.

A cynic might wonder if the scholarship is contingent on the research proposal supporting Auckland’s vision of transforming itself into a compact city?

3. Moody's: Australian Houses Not Overvalued
With Auckland property prices nipping on Sydney’s heels in terms of housing affordability, mortgage holders will probably take some small solace from the Moody’s announcement that Australia isn’t in bubble territory yet.

Hold on a minute, didn’t “bubble-ologist” Alan Greenspan say it was impossible to spot asset bubbles until they burst?

As is the way of credit rating agencies, there must be a warning somewhere and Moody’s did highlight it sees the “risks skewed to the downside” in the Australian housing market.

They warned that they wouldn’t want to see a further acceleration in house price growth, that the banks must not loosen lending standards, and that it is worried about regional economies making the economic adjustment.

4. Technology to end taxi rort?
To economists, for whom monopolies are an anathema, the news that one of the most pervasive cartels in the world – the taxi industry – is starting to crack amid the rise of the sharing economy can only be a good thing.

Pity it was too late for this poor soul, who had to fork over $200 to get from Auckland Airport to the North Shore.

The national taxi industry body is looking into claims against Auckland Black Cabs, owned by the biggest taxi business in New Zealand, and Auckland Airport has vowed to speak to the company about its high fares. Christchurch businessman John Ascroft contacted the Herald about his $198.40 fare for a 37.4km trip with Auckland Black Cabs to Albany in February - that's $5.30 for every kilometre he travelled.

5. Cause of future crisis laid in the old
It turns out the Global Financial Crisis is now being blamed for a future economic disaster at some point down the track. No, not because of some exotic derivative instrument, but something rather the simple act of procreating.

A new report claims the GFC dropped the global birth rate, which is likely to limit the number of workers joining the economy in several decades, a detriment to future growth.

The financial crisis … did more than wipe out billions in wealth and millions of jobs. It also sent birth rates tumbling around the world as couples found themselves too short of money or too fearful about their finances to have children. Six years later, birth rates haven't bounced back. For those who fear an overcrowded planet, this is good news. For the economy, not so good.

6. Correcting the real workplace imbalance
The gender pay gap may get all the limelight, but there are other forms of festering inequality in the office, namely rewards for being attractive.

Researchers have confirmed that not only do beautiful people date more, but they get paid better too.

Though if an attractiveness tax were implemented, this correspondent wonders how many average looking  - but vain  - people would voluntarily pay it?

One Harvard researcher calculated that attractive people earn, on average, 10-15% more than workers of below average beauty. For the same reason that attractive salespeople do a better job selling everything from beer to enterprise software, hiring an attractive CEO leads to a bump in a company's stock price -- at least in the short run.

7. It pays to be rude (for retailers)
Ever wondered why some retail staff, and generally in the pricier stores, are rude to their customers?

It hardly makes sense in what we term the service industry. Except that new research suggests rudeness skews buyer behaviour towards splashing out on more expensive items.

So what they lose on the swings, they more than recover on the roundabouts.

Consumer complaints recently have pressured some luxury retailers to train their staffs to be more approachable; Louis Vuitton even went as far as decorating the entrance of its Beverly Hills store with a smiling cartoon apple in 2007. But if luxury retailers want to continue to rake in the dough, they actually should do the exact opposite, [a] study found. The ruder the salesperson the better.

8. Foreign investment hell freezes over
Last week, a leader of an Island nation declared his country open for business. We are of course taking about the nation of Cuba, which threw open its doors to inward foreign investment flows.

If the communists can do it, why can’t we?

Some details of the legislation emerged in official media in recent days. Among other things, it would cut taxes on profits by about half, to 15 per cent, and make companies exempt from paying taxes for the first eight years of operation.

9. Lack of urban redtape drives growth
Cities in Texas, one of the least restrictive jurisdictions when it comes to redtape, again emerged as the urban areas with the fastest pace of economic growth in the US.

Data from the Metro Monitor also showed that house prices in the region were relatively flat, suggesting you can have your cake and eat it.

Texas metropolitan areas continue to dominate economic growth, according to the latest Metro Monitor, produced by the Brookings Institution. The four top metropolitan areas in overall economic growth through the recession and "recovery" have been: 1. Austin, 2. Houston, 3. Dallas-Fort Worth, [and] 4. San Antonio.

10. Why language should not be a barrier
The Economist has noted that if we accepted Russian thinking about language and Ukrainian sovereignty, and extrapolated it to the world, the global landscape would look entirely different. Though it might not be entirely unrecognisable to someone living in the 1850s.

Under Mr Putin’s dispensation, things look up for the old colonial powers. Portugal gets to reclaim Brazil, Spain most of the rest of Central and South America and France most of west Africa, which would probably be fine by the locals, since many of their current governments are not much cop.