Andrew Coleman

• University of Otago

We investigate the relationship between financial literacy, debt anxiety, risk tolerance, and subsequent resource allocation decisions for cohorts of retirees. Using a survey and the novel comparative method of Multi-Criteria Decision-Making Analysis we prioritise retirement allocation choices of older New Zealanders. Retirees display high financia...

This study investigates the effect of financial literacy on debt ownership, debt anxiety and risk tolerance of older individuals. Contrary to prior evidence that financial literacy is not associated with retirement planning in New Zealand our findings suggest that financial literacy is important for retirement preparedness. “Advantage” (high income...

This study investigates the impact of housing on financial adequacy of New Zealand retirees using the Survey of Family, Income, and Employment (SoFIE) data for the period 2002–2009. We examine the differential effect of housing liquidation options, rent imputation and asset liquidity on financial adequacy. We report evidence of financial adequacy v...

This paper develops a heterogeneous‐agent overlapping generations model that examines how the neutrality of the tax system with respect to inflation depends on the price elasticity of the housing supply. The model, which endogenises house prices and rents, and which incorporates detailed tax regulations and bank‐imposed credit constraints, shows (a...

The sequestration of CO2 in forests is often suggested as a means to offset greenhouse gas emissions. New Zealand's experience suggests the effects of government programmes to provide carbon credits to forest owners could be enhanced if forward markets, futures markets, or carbon-lending markets were used to manage risks. This paper provides a comp...

This paper examines the interaction of different policies used to control two types of agricultural pollution. Pollution control policy is efficient when both pollution types are controlled by taxes, although a tax increase on one type of pollution can increase the quantity of another type of pollution if farm inputs are substitutes. However, if on...

This paper evaluates four retirement income policies that could be adopted in response to increasing longevity in terms of their marginal effects on economic performance, equity, and risk. Compared to three alternative save-as-you-go funded retirement income policies (voluntary saving, a prefunded government superannuation scheme, or a supplementar...

The New Zealand Regional Housing Model (NZRHM) includes estimated equations for four key housing market variables: house prices, housing supply (new dwelling consents), residential vacant land (lot) prices, and average rents. Long run (cointegration) relationships and short run (error correction) relationships are estimated for each of these variab...

This paper analyses how much different cohorts can expect to contribute into the PAYGO-funded New Zealand Superannuation scheme, and contrasts it with the amount each cohort can be expected to obtain in benefits if the current scheme is continued. The analysis is based on historic census and contributions data and SNZ projections of future populati...

The average value of a particular class of agricultural exports varies widely across different destinations. This raises the question: in the event of a supply shock, such as the implementation of the Emissions Trading Scheme, can farmers offset higher costs by raising their average prices by contracting exports to lower value destinations? If the...

This paper examines the home production activities of newly formed and long established households in rural New York over a twenty year period after the Erie Canal was built. It shows that newly established households had lower home production activities than long established households resident in the same area, conditional on the size, age, and l...

This paper examines the relative size of the effects of macroeconomic news on the spot exchange rate, and interest rate differentials (2- and 5-year swap rate differentials), and the synthetic forward exchange rate schedule, for the high-frequency New Zealand data. We find that the spot exchange rate and 5-year swap rates respond by a similar magni...

Whether Australia and New Zealand should have a single currency is periodically debated in New Zealand. There was a resounding ‘No ’ when the question was discussed in the early 1990s, but there was less agreement when the debate resurfaced two or three years ago. 2 Indeed, the idea now has considerable support

This paper summarises recent theoretical and empirical developments in the vast literature that has examined the microeconomic determinants of household saving. It is designed as a primer to provide a basic understanding of some of the developments in the literature in the last decade. The paper uses the standard intertemporal optimising model as t...

This paper uses spatial statistical techniques to examine the economic determinants of residential location patterns in Auckland in 2006. The primary empirical focus of this paper is descriptive. We seek to establish the extent to which there are identifiable population subgroups that cluster together within the Auckland Urban Area, and further, to...

This paper analyses the location choices of new entrants to Auckland between 1996 and 2006, to identify a systematic relationship between residential location choices and features of local areas such as population density, the population composition of the area or its neighbourhood, accessibility to different types of amenities, paying particular a...

This paper analyses the location choices of new entrants to Auckland between 1996 and 2006, to identify a systematic relationship between residential location choices and features of local areas such as population density, the population composition of the area or its neighbourhood, accessibility to different types of amenities, paying particular a...

Under the New Zealand Emissions Trading Scheme, foresters can obtain carbon units as their forests sequester carbon. If they sell these units as they are earned, the units must be repurchased when the forest is harvested, exposing foresters to price risk. This paper examines the way forward markets, futures markets, and carbon lending markets could...

‘Betterment’ taxes can be used to fund infrastructure investments. We relate betterment taxes to the benefit: cost ratio, deriving conditions under which a project can be funded by such taxes, and relate betterment taxes also to a capital gains tax.

Although much work has been done analysing the possible causes of the New Zealand-Australian income gap, to date there has been little analysis of the extent to which this gap differs by gender and age. Using New Zealand and Australian employment and census data we examine these differences and find that (1) over the last 25 years the incomes of Ne...

This paper examines the uncovered interest parity hypothesis using the dollar-sterling exchange rate during the gold standard era. This period is interesting because the exchange rate was seasonal, because transactions costs were high, and because occasions when uncovered interest rate speculation did not occur can be identified. The paper shows UI...

The consumption wealth effect is often interpreted as capturing the effect of unexpected permanent movements in wealth on consumption. Relatively recently however, Lettau and Ludvigson (2004) found that in the United States, changes in wealth are mostly transitory, implying that only a small fraction of total wealth variation actually has a measura...

This paper examines how increasing longevity affects the housing choices of working age and retired people using a heterogeneous agent overlapping generations model that incorporates owner-occupier and rental sectors, credit constraints, detailed tax regulations, and a housing supply sector. Increasing longevity is predicted to increase the fractio...

Land taxes are known to be amongst the most efficient forms of taxation since land is an immobile factor; property (capital value) taxes are less efficient owing to the tax on improvements. However there is little international (or New Zealand) evidence regarding the distributional impacts of land and property taxes. Nor is there much New Zealand e...

This paper develops a model of the housing market incorporating a construction sector, a rental sector, and a housing demand sector to examine the long term consequences for the housing market of different types of capital gains taxes. The sector is based on an overlapping generations model of the economy that included a detailed representation of...

This paper argues that localized price spikes should be a regular feature of competitive commodity markets. It develops a rational expectations model of physical arbitrage in which trade takes time, and shows that inventory management plays a crucial role in the way regional prices are determined. In equilibrium, arbitrageurs choose export quantiti...

This article solves a high-frequency model of price arbitrage incorporating storage and trade when the amount of trade is limited by transport capacity constraints. In equilibrium there is considerable variation in transport prices because transport prices rise when the demand to ship goods exceeds the capacity limit. This variation is necessary to...

This paper develops an overlapping generations model incorporating credit constraints, owner-occupier and rental sectors, and detailed tax regulations to examine how the interaction of inflation and the tax system affect the housing market. It shows that even modest rates of inflation can have very large effects on the home-ownership rates of young...

This paper develops a simple model that captures the essential features of the supply and demand for housing, and which is used to evaluate the impact of a range of policy interventions. The model incorporates functions describing the demand to rent or purchase housing, a function describing the supply of rental housing, and a function describing t...

Commodities are often stored when the spot price exceeds the future price in a central market. Wright and Williams conjectured that inventories are held in locations far from the central market on these occasions. In these locations the spot price is lower than the price for forward delivery because transport costs are temporarily high. This hypoth...

This paper examines the relative size of the effects of New Zealand monetary policy and macroeconomic data surprises on the spot exchange rate, 2 and 5 year swap rate differentials, and the synthetic forward exchange rate schedule. We find that the spot exchange rate and 5 year swap rates respond by a similar magnitude to monetary surprises, implyi...

This paper analyses the effect of inflation on the measurement of saving and housing affordability in New Zealand. When the inflation rate is positive, the income and saving of lenders is overstated and the saving of borrowers is understated because a portion of the interest earnings on capital are not true earnings but merely compensation for infl...

This paper uses a structural vector autoregression model to analyse the relationship between migration flows, housing construction and house prices in New Zealand. It shows that a net immigration flow equal to one percent of the population is associated with an approximately 10 percent increase in house prices. This size of this relationship, which...

The paper develops an overlapping generations model incorporating a realistic depiction of the credit constraints facing home buyers to explain why home ownerships rates have declined in New Zealand since 1990 despite a significant relaxation of credit constraints. The model focuses attention on the role of property investors in the property market...

This paper argues that bilateral spatial price models do not estimate bilateral transactions costs when trade with third cities is important. The paper examines trans-Atlantic gold arbitrage during the gold standard era by assembling a database indicating when trans-Atlantic gold shipments occurred. It shows that two-way gold shipments between New...

This article presents a detailed comparison of price changes for non-tradable and tradable items in the CPI across Australia and New Zealand. The main result is that relative price movements in Australia and New Zealand are highly correlated in the medium term, although not in the very short term. Sectors that have had large price increases in New...

TIn the last decade, central banks have conducted new research enhancing their understanding of firm level price-setting behaviour. This work has revealed new information about the frequency with which firms change prices and provided explanations as to why prices are sticky. This information could potentially improve monetary policymaking and, as...

This draft book chapter provide an overview of Maori economic development during the past 150 years, drawing on readily available statistical and historical sources. The path of Maori economic development that we have traced through statistical evidence is one of ongoing change and adaptation, as well as one of substantial increase in material stan...

This paper solves a rational expectations model of price arbitrage incorporating storage and trade when there are capacity constraints limiting the amount that can be exported in any period. It shows that the law of one price will hold, but do so because transport costs rise to make it hold when the demand to ship goods exceeds the capacity limit....

This paper develops a rational expectations model of physical arbitrage incorporating storage and trade to explain how markets are integrated when trade is costly and non-instantaneous. The paper finds a striking empirical verification of the model from an analysis of the late nineteenth century corn markets in Chicago and New York. The dataset is...

This paper examines whether electoral motives and government ideology influence short-term economic performance. I employ data on annual GDP growth in 21 OECD countries over the 1951-2006 period and provide a battery of empirical tests. In countries with two-party systems GDP growth is boosted before elections and, under leftwing governments, in th...

Recent research shows that trade of goods and financial products is much greater within countries than it is between countries, even allowing for factors such as transports costs. This lack of economic integration is likely to be costly for small nations, as internal trade is much less diverse than internal trade in large nations. European countrie...

We conduct an event study that examines how the New Zealand - US (NZ/US) and the Australia - US (AU/US) exchange rates responds to the release of Australian macroeconomic news including the CPI, GDP, trade balance, and monetary policy decisions. We use two different measures of the unanticipated component of the news announcements. First, we use th...

The paper develops and solves a simple model of urban Location choice when there is a location-based income externality such as a tendency for schools to be better in high income areas than low income areas. In the model, households choose between consumption of a Location externality, paid for by rent, and consumption of ordinary goods and service...