Canterbury University's Tom Coupé looks at NZ from an international perspective, including, the country of volunteers, a good place for minorities, (un)affordable housing, treating women with respect & more

Today's Top 10 is a guest post from Tom Coupé an Associate Professor in the Economics and Finance Department at Canterbury University.

As always, we welcome your additions in the comments 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.

One way to discover the world and become ‘globally aware’ is to travel. An alternative (admittedly an imperfect alternative) is to look at comparative international statistics. In this Top 10, I compare New Zealand to other countries on the basis of the Gallup World Poll. The Gallup World poll surveys about 1,000 individuals in over 100 countries, using a standard set of core questions that cover a wide range of issues. This year, thanks to the support of the University of Canterbury foundation, students and staff of the University of Canterbury have access to the Gallup World Poll.

1. A country of volunteers.

Let’s start with things New Zealand excels at. ‘It is, what it is’ is a popular expression, but many people in New Zealand are trying to make New Zealand a better place. Out of all OECD countries [OECD countries are the richer countries in the world and hence a reasonable benchmark for New Zealand], New Zealand respondents were most likely to answer ‘yes’ on the question ‘Have you done any of the following in the past month? How about volunteered your time to an organization? In 2017 in New Zealand, 40% of respondents said ‘yes’, compared to the OECD average of 26%.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

Similarly, New Zealand scores 2nd in the group of OECD countries in terms of indicating they ‘helped a stranger or somebody who needed help’ in the past month and 3rd in terms of ‘having donated money to a charity’ in the past month.

The economic value of all this volunteering is substantial. Here is an example of an estimate for the UK:

‘The Office for National Statistics reckons that frequent, formal volunteering produces about £24 billion of economic output for Britain. That’s equivalent to 1.5% of GDP. Volunteering produces twice as much value as the agriculture sector and about the same amount as the telecoms sector. Informal volunteering—different kinds of mutual help and co-operation between individuals—might add another £19 billion of output. Add in infrequent volunteering and you're looking at around £50 billion, roughly the size of the British energy sector.’

2. A good place for minorities.

New Zealand respondents were also very likely to agree that ‘the city or area where you live a good place to live for racial and ethnic minorities’. 90% of New Zealand respondents agreed with this, compared to a 74% OECD average, making New Zealand the second highest scoring country among OECD countries.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

Consistent with this, the 2018 World Happiness report shows that New Zealand is in the top 5 of countries where migrants are the most happy.

3. Troubles with Public Transportation.

While on the vast majority of indicators New Zealand scores well or very well compared to other countries, there are exceptions. One of these is the satisfaction with public transportation. When asked ‘In the city or area where you live, are you satisfied or dissatisfied with the public transportation systems?, only 47% of the New Zealand respondents indicated they were satisfied, which is low compared to the OECD average of 61%. At 47%, New Zealand does worse than Afghanistan (48%) and equally good/bad as Libya. The world top 5 in 2017 for this indicator consists of Singapore, Uzbekistan, Switzerland, Hong Kong and Luxemburg.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

If you are unhappy about the public transport, you might want to read this:

“Apparently commuting by public transport makes you happier. It must be the fresh air and fascinating aromas that help Lauren to unwind”

4. (Un)Affordable Housing.

Few will be surprised by another indicator on which New Zealand scores badly. The Gallup World Poll asks “In the city or area where you live, are you satisfied or dissatisfied with the availability of good, affordable housing? In 2017, only about 40% of the New Zealand respondents agreed, which is substantially less than the OECD average of 54%. Other countries that have 40% satisfaction score are Chad, Lithuania, Tanzania and Ukraine. The world top 5 in 2017 for this indicator consists of Thailand, Kosovo, Nepal, Uzbekistan and Cambodia.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

New Zealand’s score is not only bad, it also has been deteriorating quickly over the last 7 years. But maybe things are changing?

“Housing affordability is improving for first home buyers in most parts of the country but the improvements are so small most aspiring first home buyers probably wouldn't notice the difference, according to interest.co.nz's latest Home Loan Affordability Reports.”

5. Treating women with respect and dignity.

The Gallup World Poll is not only great to identify what New Zealand is excelling at, or what New Zealand is not doing so well, it also helps to put some ‘hot topics’ in a comparative perspective.

This year, New Zealand celebrates that women won the right to vote 125 years ago. A gender-related question in the Gallup World Poll asks respondents whether they “believe that women in this country are treated with respect and dignity, or not?” In 2017 in New Zealand, about 80% agreed with this statement, with men (82.6%) somewhat more likely to agree than women (78.6%). Not a bad score, though one might be surprised by the top 5 of countries where women are most likely to agree with this statement (from first to fifth): United Arab Emirates, Singapore, Uzbekistan, Norway and Cambodia.

Source: author calculations based on Gallup World Poll.

There is a large academic literature on how economics affects women empowerment and vice versa, how female empowerment affect the economy. Esther Duflo (2012), professor at the MIT, concludes her review of this literature as follows:

“This suggests that neither economic development nor women’s empowerment is the magic bullet it is sometimes made out to be. In order to bring about equity between men and women, in my view a very desirable goal in and of itself, it will be necessary to continue to take policy actions that favor women at the expense of men, and it may be necessary to continue doing so for a very long time. While this may result in some collateral benefits, those benefits may or may not be sufficient to compensate for the cost of the distortions associated with such redistribution. This measure of realism needs to temper the positions of policymakers on both sides of the development/empowerment debate”.

6. Satisfaction with Educational system.

While the NZ teachers might be unhappy about their pay, the New Zealand public is clearly satisfied with its teachers. When asked ‘In the city or area where you live, are you satisfied or dissatisfied with the educational system or the schools?’, 72% of New Zealand respondents indicated they were satisfied, compared to the OECD average of 65%.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

For some recent research on the impact of (long) teacher strikes on students, check out this paper on Argentina or this paper on Canada.

7. Business and Consumer Confidence.

Another hot topic is the confidence of businesses and consumers in the New Zealand Economy. The Gallup World Poll asks ‘Right now, do you think that economic conditions in the city or area where you live, as a whole, are getting better or getting worse?’ From 2010 onwards, the New Zealand respondents have been substantially more optimistic than the typical respondent in the OECD. Unfortunately, the 2018 data for New Zealand are not yet available.

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

A good NZ focused read on whether one actually should care about business confidence can be found here:

“The business community’s confidence in the economy – and therefore the government – seems to have hit a new low recently. There have been dozens of articles published in the last couple of weeks highlighting business concerns. So how seriously should politicians take the constant surveys about business confidence?”

And maybe it makes sense to start thinking of creating a News sentiment index for New Zealand.

“In the following paper, we use a topic modeling algorithm and sentiment scoring methods to construct a novel metric that serves as a leading indicator in recession prediction models. We hypothesize that the inclusion of such a sentiment indicator, derived purely from unstructured news data, will improve our capabilities to forecast future recessions because it provides a direct measure of the polarity of the information consumers and producers are exposed to. We go on to show that the inclusion of our proposed news sentiment indicator, with traditional sentiment data, such as the Michigan Index of Consumer Sentiment and the Purchasing Manager’s Index, and common factors derived from a large panel of economic and financial indicators helps improve model performance significantly.”

8. Confidence in Government.

Overall, New Zealand respondents have lots of confidence in their institutions. Compared to respondents in other OECD countries, they have been much more likely to trust the national government. In 2017, 61% of New Zealand respondents answered yes to the question whether they trust the national government (2018 is not available yet).

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

9. Trust in financial institutions.

And while trust in the government in New Zealand has been high relative to other countries, this is even more true so for the financial sector. When asked whether they have confidence in ‘financial institutions or banks’, 75% of New Zealand respondents agreed, which is not only substantially higher than the 51% OECD average, but also substantially higher than the share or New Zealand respondents who have confidence in the national government (see previous graph).

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

Trust, both in the government and in financial institutions is important for economic development. A recent survey of the literature on this topic concludes:

“This survey documents two main findings. First, trust has a causal impact on economic development, through its channels of influence on the financial, product, and labor markets, and with a direct effect on total factor productivity and organization of firms. Second trust and institutions strongly interact, with causality running in both directions.”

10. Well Being.

The New Zealand government is now thinking about how to include ‘wellbeing’ in its policy decision making. The Gallup World Poll asks people about their life satisfaction on a scale from 0 (worst possible life) to 10 (best possible life).

Source: Gallup World Poll New Zealand Country Report. Comparison countries are OECD countries.

The Gallup World Poll also asked people about whether, in the day before they were interviewed, they smiled or laughed ( 80% yes, 11th out  of 35 OECD countries), felt well-rested (66% yes, 23rd ), learned something new (65%, 7th) , were treated with respect (93%, 12th) or felt enjoyment (81%, 12th) . Or experienced negative emotions like sadness (16%, 23rd), physical pain (22%, 30th),worry (26%, 33rd ), anger (9%, 30th), or stress (34%, 22nd).

Clearly, New Zealand has been scoring well on well-being, even without well-being being an explicit policy goal.

StatsNZ is still “seeking your feedback on the development of wellbeing indicators called Indicators Aotearoa New Zealand” until September 30, 2018.