Saturday, July 12, 2003

Friday on my mind 17/3/2003

Economists have been so busy designing tests to determine what makes people happy that they have overlooked something basic:

It depends on what day of the week you ask the questions.

Mark P Taylor, at the University of Essex outlines what it is in his paper Tell me why I don’t like Mondays: Investigating calendar effects on job satisfaction and well-being.

Men and women interviewed on Friday report higher levels of job satisfaction and lower levels of mental stress than those interviewed in the middle of the week.

Fortunately he concludes that the results from earlier studies probably hold up.

On Life Matters I also outlined the preliminary results from a survey entitled: STRESSED OUT ON FOUR CONTINENTS: TIME CRUNCH OR YUPPIE KVETCH?

Evidence from Australia, Germany, Korea and the United States suggests that the more you earn the more you'll feel time-stressed. In the United States a move from the 25th to the 75th percentile of the income distribution raises time stress by half as much as an interquartile change in the amount of weekly employed work!

Gerry played “Friday on my Mind by the Easybeats.

The Prime Minister’s Home Ownership Task Force 10/3/2003

When a really good idea comes along, a lot of people immediately assume that there must be something wrong with it.

The joke goes: Two economists are strolling down the street when they come upon a $100 note lying on the ground. One economist says to the other "Aren't you going to pick it up?" The economist from Chicago replies: "No, it's a fake. If it wasn't someone would have picked it up already.

It was like that with the Prime Minister's Home Ownership Taskforce. I have outlined the idea here and here. And also to Gerry.

The ideas derived by the Menzies Research Centre for the Prime Minister hold the promise of solving a number of problems very well. Why have Do It Yourself super funds done so much better than professionally managed funds in recent years? Because the DIY funds had housing in them, and the professionally managed funds didn't as much. How could they? There is no easy way for super funds to own houses. The idea of sharing ownership between financial institutions and part-owner occupiers ("managing partners") would give the funds access to the largest asset class on earth and would give would be home owners to ability to move in.

Critics say it would force up the price of housing. So would any move that makes it easier to get into houses. The Task Force has come up with ways to increase the supply of land for housing as well, using innovative techniques to stop NIMBY's complaining. For low income homeowners there would be government loans, repayable in the good times along the lines of the HECS scheme.

They are good ideas whose time is coming.

Our love affair with Cash 3/3/2003

How much cash do you have about your person right now? When I asked Gerry shed told me the answer was less than twenty dollars. For most of us, it certainly wouldn't be $1,000. Yet according to the official figures around $32 billion in notes is out there in people's possession at the moment - that's about $1,600 for each Australian man, woman and child. That’s more than the typical American, the typical Canadian, the typical Brit, and about three times as much as the typical New Zealander.

RBA comparative figures from 1996 show Australians holding cash of $US870 each, yanks $US610, and NZers $280!

We are eclipsed by some European countries and Japan. The Japanese held at the time $US3,588 under their beds and in other places.

Which is understandable. Japan has deflation. The Japanese don't trust the banks, and for historical reasons neither do many Europeans. But how can we explain Australains love affair with cash?

Christopher Bajada, of the UTS attempts to and comes up with the conclusion that much of it is used to store the proceeds of crime.

The RBA figures suggest this may well be the case. Almost half of the cash we hold about our person is in the form of $100 notes.

Officially we each hold about as many $100 notes per person as we do $20 notes (six to seven).

You and I know this is not true, leading to the thought that perhaps most of Australia's 130 million $100 notes are stored away in suitcases somewhere unopened.

Reserve Bank figures on the life of the notes lend support to this notion. $100 notes last an estimated 70 years. $20 notes last twelve years.