Murat Genç

Food prices and consumer demand: differences across income levels and ethnic groups.

Background Targeted food pricing policies may improve population diets. To assess their effects on inequalities, it is important to determine responsiveness to price changes across income levels and ethnic groups. Objective Our goal was to estimate price elasticity (PE) values for major commonly consumed food groups in New Zealand, by income and ethnicity. PE values represent percentage change in demand associated with 1% change in price of that good (own-PE) or another good (cross-PE). Design We used food expenditure data from national household economic surveys in 2007/08 and 2009/10 and Food Price Index data from 2007 and 2010. Adopting an Almost Ideal Demand System approach, own-PE and cross-PE estimates were derived for 24 food categories, household income quintiles, and two ethnic groups (Māori and non-Māori). Results Own-PE estimates (with two exceptions) ranged from −0.44 to −1.78. Cross-PE estimates were generally small; only 31% of absolute values were greater than 0.10. Excluding the outlier ‘energy drinks’, nine of 23 food groups had significantly stronger own-PEs for the lowest versus highest income quintiles (average regression-based difference across food groups −0.30 (95% CI −0.62 to 0.02)). Six own-PEs were significantly stronger among Māori; the average difference for Māori: non-Māori across food groups was −0.26 (95% CI −0.52 to 0.00). Conclusions Food pricing policies have potential to improve population diets. The greater sensitivity of low-income households and Māori to price changes suggests the beneficial effects of such policies on health would be greatest for these groups.

Trade, Diaspora and Migration to New Zealand

NZIER has always had a strong interest in understanding the way in which the New Zealand economy interacts with the rest of the world. We have a long history of producing research into trade liberalisation and globalisation. As the global economy becomes ever more complex, we are now turning our attention to issues such as services, investment, technology transfer and the role of people movement in promoting economic growth and productivity. NZIER is delighted to continue this tradition by funding this important and innovative piece of research by David Law, Murat Gen and John Bryant into the links between trade flows and the movement of people across borders. This research was funded by NZIER in celebration of our 50th Anniversary in 2008. During this very challenging period for the global economy, there has been a tendency for policy makers to implement inwards-focused policies aimed to protecting domestic jobs and promoting domestic economic activity. Such policies are politically popular, but can be economically inefficient and often come at the expense of deeper economic integration between countries. One particularly topical area of policy discussion is the role of immigration in promoting economic growth. New Zealand has long been reliant on immigration to boost its population and to fill gaps in the labour market. And many Kiwis love to travel overseas to gain life and work experience. Given these continual inflows and outflows, it is interesting to consider how people movements might affect the New Zealands exports and imports of goods and services, and thus how immigration policy might be used as a policy lever to boost our international linkages. The paper uses empirical techniques to investigate the links between trade, migration and New Zealands diaspora. It clearly shows that inwards and outwards migration has a positive effect on goods and tourism trade. This suggests that policy makers could design immigration policy with these links in mind in order to maximise the economic potential of migrants. If trade follows migration flows, then an important avenue for boosting New Zealands integration with the global economy may be encouraging migrants from important trading partners.

Understanding Price Elasticities to Inform Public Health Research and Intervention Studies: Key Issues

Pricing policies such as taxes and subsidies are important tools in preventing and controlling a range of threats to public health. This is particularly so in tobacco and alcohol control efforts and efforts to change dietary patterns and physical activity levels as a means of addressing increases in noncommunicable diseases. To understand the potential impact of pricing policies, it is critical to understand the nature of price elasticities for consumer products. For example, price elasticities are key parameters in models of any food tax or subsidy that aims to quantify health impacts and cost-effectiveness. We detail relevant terms and discuss key issues surrounding price elasticities to inform public health research and intervention studies.

Migration and Tourism Flows to New Zealand

This paper uses a gravity model to test whether, all else equal, tourism flows to New Zealand from countries with larger stocks of migrants to New Zealand are larger. It uses an unbalanced panel data set consisting of more than 190 countries that New Zealand has traded with between the years 1981 and 2006. A panel negative binomial model is employed to estimate the multiplicative form of the gravity model. The coefficient of the logarithm of the migrant stock variables is found to be statistically significant, implying that a 10 % increases in immigrants from a country leads to a 2.1 % increase in the number of visitors from that country, all else equal.

Effects of Health-Related Food Taxes and Subsidies on Mortality from Diet-Related Disease in New Zealand: An Econometric-Epidemiologic Modelling Study.

Background Health-related food taxes and subsidies may promote healthier diets and reduce mortality. Our aim was to estimate the effects of health-related food taxes and subsidies on deaths prevented or postponed (DPP) in New Zealand. Methods A macrosimulation model based on household expenditure data, demand elasticities and population impact fractions for 18 diet-related diseases was used to estimate effects of five tax and subsidy regimens. We used price elasticity values for 24 major commonly consumed food groups in New Zealand, and food expenditure data from national Household Economic Surveys. Changes in mortality from cardiovascular disease, cancer, diabetes and other diet-related diseases were estimated. Findings A 20% subsidy on fruit and vegetables would result in 560 (95% uncertainty interval, 400 to 700) DPP each year (1.9% annual all-cause mortality). A 20% tax on major dietary sources of saturated fat would result in 1,500 (950 to 2,100) DPP (5.0%), and a 20% tax on major dietary sources of sodium would result in 2,000 (1300 to 2,700) DPP (6.8%). Combining taxes on saturated fat and sodium with a fruit and vegetable subsidy would result in 2,400 (1,800 to 3,000) DPP (8.1% mortality annually). A tax on major dietary sources of greenhouse gas emissions would generate 1,200 (750 to 1,700) DPP annually (4.0%). Effects were similar or greater for Maori and low-income households in relative terms. Conclusions Health-related food taxes and subsidies could improve diets and reduce mortality from diet-related disease in New Zealand. Our study adds to the growing evidence base suggesting food pricing policies should improve population health and reduce inequalities, but there is still much work to be done to improve estimation of health impacts.

Aggregation and heterogeneity of choice sets in discrete choice models

Aggregation methods for making aggregate predictions from disaggregate discrete choice models have previously been developed and analyzed by several authors. The representative agent, classification, and statistical differentials methods are modified to account for heterogeneity of choice sets. An empirical analysis that makes comparisons between the adjusted and unadjusted methods is also provided. The results indicate that the adjusted methods produce much more accurate aggregate predictions than the unadjusted methods.

Study protocol: combining experimental methods, econometrics and simulation modelling to determine price elasticities for studying food taxes and subsidies (The Price ExaM Study)

BackgroundThere is a need for accurate and precise food price elasticities (PE, change in consumer demand in response to change in price) to better inform policy on health-related food taxes and subsidies.Methods/DesignThe Price Experiment and Modelling (Price ExaM) study aims to: I) derive accurate and precise food PE values; II) quantify the impact of price changes on quantity and quality of discrete food group purchases and; III) model the potential health and disease impacts of a range of food taxes and subsidies. To achieve this, we will use a novel method that includes a randomised Virtual Supermarket experiment and econometric methods. Findings will be applied in simulation models to estimate population health impact (quality-adjusted life-years [QALYs]) using a multi-state life-table model. The study will consist of four sequential steps:1.We generate 5000 price sets with random price variation for all 1412 Virtual Supermarket food and beverage products. Then we add systematic price variation for foods to simulate five taxes and subsidies: a fruit and vegetable subsidy and taxes on sugar, saturated fat, salt, and sugar-sweetened beverages.2.Using an experimental design, 1000 adult New Zealand shoppers complete five household grocery shops in the Virtual Supermarket where they are randomly assigned to one of the 5000 price sets each time.3.Output data (i.e., multiple observations of price configurations and purchased amounts) are used as inputs to econometric models (using Bayesian methods) to estimate accurate PE values.4.A disease simulation model will be run with the new PE values as inputs to estimate QALYs gained and health costs saved for the five policy interventions.DiscussionThe Price ExaM study has the potential to enhance public health and economic disciplines by introducing internationally novel scientific methods to estimate accurate and precise food PE values. These values will be used to model the potential health and disease impacts of various food pricing policy options. Findings will inform policy on health-related food taxes and subsidies.Trial registrationAustralian New Zealand Clinical Trials Registry ACTRN12616000122459 (registered 3 February 2016).

Neighbourhood Ethnic Diversity, Child Health Outcomes and Women’s Empowerment

Abstract Much of the existing literature suggests that ethnic diversity undermines economic development. However, there are also ways in which local ethnic diversity might be beneficial, and we show that in the case of Ethiopian child health, the benefits of diversity can outweigh the costs. We find that children in relatively diverse communities are better nourished and more likely to receive a full set of vaccinations. There is some evidence that one explanation for this effect is that women in relatively diverse communities are better informed about health issues and more empowered in making healthcare decisions.

The Determinants of Regulatory Responses to Risks from Financial Innovation: Post GFC Evidence for the G20

We explore the factors that shape the response of G20 countries to a Financial Stability Board (FSB) recommendation aimed at mitigating the risks from financial innovation. Using the FSB’s Implementation Monitoring Network Surveys, we develop an index of disclosed strength of regulatory response. We find that G20 countries have displayed large interpretive differences, little forward planning and have emphasized regulatory capabilities over firm capabilities when addressing the recommendation. Countries with strong central banks, more concentrated regulatory structures and bank-based financial systems responded more robustly, while countries with a large financial sector were marginally associated with a weaker response.