Donal Curtin

Donal Curtin is a macroeconomist (former chief economist for a big bank), writer (six years as a financial journalist with Euromoney, award-winning economics columnist, blogger), economic regulator (12 years on the Commerce Commission). He has an economics consultancy based in Auckland and blogs for The Dismal Science. Donal is on Twitter @donal_curtin

As expected - The Dismal Science

Sep 27, 2018

The NZME/Fairfax Court of Appeal judgement is out and contained few surprises. The Court had been widely anticipated to rebuff the appeal against the Commerce Commission’s refusal to authorise the proposed merger of NZME (the Herald, radio stations, and a herd of other North Island media businesses) and Fairfax (DomPost, Press, S-ST, herd of other media things nationwide). So it did. Rather, the interest was always going to be in what it said about the Commerce Act and how it is supposed to operate. In particular, was the Commission allowed to count non-economic things in the balancing of benefits  and detriments that goes on in a merger authorisation? In this case, the big non-economic detriment was the social loss of media plurality (a very large share of the take on the news would be in one pair of hands). Read More

We take the plunge… - The Dismal Science

Sep 26, 2018

…and in the interests of scientific inquiry our household has a go at changing electricity retailers. Time, in short, to stop being the competition equivalent of an unmarried marriage counsellor, and actually use the tools available to increase competition in electricity retailing. We haven’t been averse to switching in the past, but I’d got disillusioned by the first wave of retail competition. The phone would go – it was usually telephone marketing then – and we’d get an offer. Of sorts: a lower fixed daily rate but a higher cents per unit usage rate, or a lower cents per unit usage rate and a higher fixed daily rate. No offer at that time was unambiguously better than your incumbent’s tariff, with lower fixed and lower usage rates. You were reduced to getting out a calculator and figuring out whether you’d … Read More

Regulation done right - The Dismal Science

Sep 06, 2018

From overseas I’ve caught up with the news that the Telecommunications Commissioner Dr Stephen Gale has decided not to deregulate the market for national mobile roaming. The current regime (summarising a bit) is that the incumbent mobile network operators (Spark, Vodafone, 2degrees) have to provide wholesale network access to any serious new entrants. That way the new entrant is able to offer a national service from day one: offering patchy network coverage would otherwise be a big turnoff to potential customers and realistically would all but nobble a new entrant’s prospects. National roaming is a ‘specified’ service, which in telco regulatory jargon means that it must be made available, but on commercial terms struck between an incumbent and an entrant. A more stringent form of regulation would be a ‘designated’ service, at a price set by the Telecommunications Commissioner. Read More

How competition benefits women’s pay - The Dismal Science

May 23, 2018

Last year the folks at Motu came up with a great piece of research which, among other things, showed that wage discrimination against women in New Zealand was less when firms faced greater competition. The logic is simple: you might try to discriminate if you could get away with it without repercussions, but you’d pay dearly for indulging in your sexist preferences when there are plenty of firms competing with you who’ll scoop up the qualified women and do better than you. Ditto, sexism will cost you when the labour market is tight, since you can’t afford to be unfairly picky when staff are harder to find than usual. Here’s the guts of the results, from my blog post at the time. The impacts of more competition and tighter labour markets are very large indeed: That already … Read More

Mind the gap - The Dismal Science

May 09, 2018

We’ve been lucky, over the past year, to see two top-notch, data-heavy analyses of the gender pay gap appear in New Zealand. One, from March last year, is by AUT’s Gail Pacheco, ‘Empirical evidence of the gender pay gap in New Zealand’, and was done for the Ministry for Women. The other, also last year, was by Motu Research‘s Isabelle Sin, Steven Stillman and Richard Fabling, ‘What drives the gender wage gap? Examining the roles of sorting, productivity differences, and discrimination’, and saw the light of day thanks to the Marsden Fund (and which I posted about in ‘Competition is good for women’s pay’). Gail reprised her research last night at the latest Auckland Law and Economics Association of New Zealand seminar, and if you’re interested in the topic and you’re based in Wellington, … Read More

Unemployment doesn’t strike evenly… - The Dismal Science

May 04, 2018

Yesterday’s labour force data for the March quarter came out much as expected: forecasters had been expecting a 0.6% increase in employment, and they got it, and they also got their predicted 4.4% unemployment rate, down from 4.5% in the December ’17 quarter. Even if there were no immediate dramas in the data, it’s still worth picking out one aspect – a reminder of how unemployment rates vary by ethnicity. The European and Asian rates are very much lower than those for Maori and Pacific people, and if you knew nothing else about New Zealand than what this graph showed you, you’d diagnose that we have some serious social issues to grapple with, and you’d rightly be looking very hard at our education and training systems and our active (or inactive) labour market policies. But another interesting aspect … Read More

Now you see it - The Dismal Science

Apr 25, 2018

You want to buy a widget. Bugsy’s has the model you want, it’s $6. Malone’s also sells it, for $5. You may not know Malone’s got it cheaper, so you end up paying a dollar too much at Bugsy’s. But suppose Bugsy’s and Malone’s are required by the Prevent-A-Widget-Ripoff Authority to post their prices online?  With a moment’s search you can find Malone’s cheaper price. You’re a dollar ahead. But Bugsy and Malone can also now see each other’s prices (or at least more easily than they could before). It’s possible that Bugsy will reckon he’ll never sell another widget at $6 and cut to $5. But it’s also possible that Malone will reckon he can safely raise his price to $6 and still share the market with Bugsy. Which is a long-winded way of saying that compulsory price transparency … Read More

MBIE’s slick new collection of data - The Dismal Science

Jul 04, 2017

The Ministry of Business, Innovation and Employment has released the Labour Market Dashboard – a one-stop self-service tool which displays labour market information from many different sources in one place. According to Manager of Labour Market Trends Nita Zodgekar, one of MBIE’s roles is to advise on New Zealand’s labour market and develop policy solutions to grow wages, keep employment high, and have an economy fit for the 21st century. It’s a pretty impressive effort at gathering and displaying a variety of labour market data into the one spot. Here’s just one interesting graph as a sampler: it shows the different ways companies recruit (there’s another one showing it by firm size rather than by industry). It’s in the ‘Workplace’ section, below the health and safety graphs. How job vacancies are filled by industry. Click on … Read More

The real increase in infrastructure - The Dismal Science

May 28, 2017

The government made a decent effort in the Budget to boost the spend on infrastructure, as it showed in this graph, taken from the ‘Capital at a Glance’ document handed out yesterday as part of the Budget material. But if you thought that we will have an extra $32.5 billion worth of shiny new infrastructure in four years’ time, think again. All these numbers ignore depreciation. But, as we all know, road surfaces get worn, bridges develop cracks, classrooms get leaks, equipment wears out. How much of the budgeted $32.5 billion is actually going to get us new stuff, and how much is going to maintain, repair or replace existing stuff? Repairs and maintenance are of course a good and necessary thing, and nobody’s begrudging that spend, but how much of the infrastructure is going on maintenance … Read More

The state of our telecommunications – 2017 edition - The Dismal Science

May 22, 2017

We pay too much attention to bad stuff, so here’s some good news that has come out of the Commerce Commission’s latest annual report on the state of the telco markets (media release here, quick infographic here, whole thing here). Speeds are up. Congestion is down. Value for money is better. Prices generally compare well with other countries. Competition is working. Investment is high, with a big slab of dollars going into the rollout of the Ultra-Fast Broadband (UFB) fibre project. And even though the telco team at the Commission don’t say so in the report, I’d give them credit for helping to make this happen. There are lots of ways to illustrate the good stuff: here’s just one, on fixed line broadband, which speaks for itself.   As I said in my piece on … Read More