Offsetting Behaviour: Inequality concern?

Tuesday 4 July 2017

Inequality concern?

The comms framing on the latest Roy Morgan survey puzzles me.

The survey asked New Zealanders what their greatest concern was going into the election.

They reported, in order:

Poverty and the gap between rich and poor (14% listing this as single biggest problem);
House prices and housing affordability (13.7%)
Housing shortages and homelessness (9.6%)
Government/Politicians/Political unrest (6.2%)
Immigration/Refugees (5.5%)

The middle two items are both about housing. 23.3% listed housing as their greatest concern.

But here's how Roy Morgan framed it.

New Zealanders’ concerns highlighted in run to election: Poverty and the gap between rich and poor is the single biggest issue facing New Zealand and the World according to New Zealanders

It seems odd to bundle poverty and inequality into one big thing when they're really conceptually separate things, while splitting house prices apart from housing shortages, when those are really the same thing.

I talked with Radio Live this afternoon about it, along with co-panelist Max Rashbrooke.

I argued that the inequality concern reported in the poll is likely driven by the massive concern about housing seen in the poll. The inequality stats over the past two decades have been flat, and poverty trends reverse direction depending on whether you consider things before or after housing costs.

Rashbrooke argues that inequality concern is instead driven by people slowly realising the consequences of changes that happened 30 years ago in the income distribution. It's a pretty tough proposition to test, but I'd have thought that John Creedy's work showing a decline in household consumption inequality since just before the reforms (a rise, then a fall, winding up a tiny bit below the start of the series) would suggest that isn't what's going on.

As for the stuff I'd there cited:

John Creedy and Chris Ball's work on inequality. Here's the key figure. The top line shows inequality in market income - that's before tax and transfers. Inequality in disposable income shows inequality in after-tax-and-transfer income. And inequality in consumption measures differences in household expenditures - and is a better measure of inequality in permanent income.
Here's the figure on household income growth from 1993 to 2015, from the Initiative's report on inequality, The Inequality Paradox, issued last year. Our data comes from Bryan Perry's compendium of household income statistics, albeit last year's edition.
Poverty rates before- and after-housing costs came from our earlier report, Poorly Understood.