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New Zealand households and the 2008/09 recession

Author

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  • Christopher Ball
  • Michael Ryan

Abstract

This paper quantifies how the welfare of different types of household changed between 2006/07 and 2009/10; a period which included the 2008/09 recession. We use three measures of household welfare: income, expenditure and the EV metric. Using household-level data from the Household Economic Survey (HES), we allocate households into groups, first based on one dimension (e.g. age) and then clusters. The clusters, groups of households that are similar on a number of dimensions, lead to inferences beyond what is available from our one-dimensional groups. Households in low-income groups, with children and/or who rent were particularly impacted by the recession in terms of welfare losses owing to price changes. However, we find that those in low-income groups had strong increases in expenditure; furthermore, the welfare gains from this increased expenditure more than offset the welfare losses from the price changes.

Suggested Citation

  • Christopher Ball & Michael Ryan, 2014. "New Zealand households and the 2008/09 recession," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(1), pages 21-39, April.
    • Handle: RePEc:taf:nzecpp:v:48:y:2014:i:1:p:21-39
    DOI: 10.1080/00779954.2013.834545
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    References listed on IDEAS

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    1. John Creedy, 1998. "Measuring the Welfare Effects of Price Changes: A Convenient Parametric Approach," Australian Economic Papers, Wiley Blackwell, vol. 37(2), pages 137-151, June.
    2. Mark Smith, 2007. "Microeconomic analysis of household expenditures and their relationship with house prices," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 70, December.
    3. repec:bla:ausecr:v:37:y:2004:i:4:p:454-464 is not listed on IDEAS
    4. repec:bla:ausecp:v:37:y:1998:i:2:p:137-51 is not listed on IDEAS
    5. John Creedy & Cath Sleeman, 2006. "The Distributional Effects of Indirect Taxes," Books, Edward Elgar Publishing, number 12558.
    6. Deaton, Angus, 1974. "A Reconsideration of the Empirical Implications of Additive Preferences," Economic Journal, Royal Economic Society, vol. 84(334), pages 338-348, June.
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    Cited by:

    1. David Chamberlain & Andrea Kutinova Menclova, 2015. "The effects of unemployment rate fluctuations on private health insurance coverage in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(2), pages 157-170, August.
    2. Christopher Ball & John Creedy & Michael Ryan, 2016. "Food expenditure and GST in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(2), pages 115-128, August.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D6 - Microeconomics - - Welfare Economics
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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