Category Archives: economics

Olympic Medal Count by Population and GDP

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Now that the swimming is over, Australia is likely to see its rankings in the Olympic medal tally start to fall. To feel better about this situation, people like to start pointing out that we still look pretty good for a small country and it’s certainly true that of the countries currently in the medal tally (as at 22 August 2008), we rank only 36th in terms of population. Ever since I blogged about the data-sharing site  Swivel, I have been regularly updating a data-set with the medal tally. So, it was a simple matter to add in population as well. The chart below provides a high-level overview of the medal results by population. It shows both the total number of medals won and the gold medals. The further a country sits in this chart above a 45 degree line, the better it is doing by population.

Total Medals (blue) and Gold medals by Population

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Digging into GroceryCHOICE

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Earlier this week, South Australian senator Nick Xenophon raised concerns that the Government’s FuelWatch scheme would lead to higher petrol prices and that small independent petrol retailers were likely to be disadvantaged by the scheme. So it looks likely that the FuelWatch legislation will fail to pass the senate and then fade into oblivion. I can’t say I’m too upset about this as I have been critical of the scheme. Furthermore, falling oil prices have led to a fall of around 20 cents/litre in petrol prices which takes much of the sting out of the issue.

So now I am free to turn my attention to another Australian Government initiative, GroceryCHOICE**. This scheme aims to “[help] consumers find the cheapest supermarket chain in their area without having to compare hundreds of prices”. Every month a survey is conducted of prices on around 500 different grocery items at over 600 supermarkets around the region. These prices are aggregated into “baskets” of goods in the following categories:
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A Tipping Point for Starbucks?

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On 1 July 2008, Starbucks announced the closure of around 600 outlets in the US. More drastically, on 29 July they then announced that 61 of the 84 Australian outlets would be closing.

Over on BeyondDigitalMedia, Chris Bishops posted an interesting examination of the challenges Starbucks has faced in the Australian market and goes on to predict that Gloria Jeans will suffer a similar fate.

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Update on Sydney Petrol Prices

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A little while ago I wrote about the relationship between crude oil prices and the price Sydney motorists are paying for petrol at the pump. The Australian Automobile Association (AAA) has now released their price data for June and, not surprisingly, prices continued to track moves implied by rising crude oil prices. The simple regression model suggested that average prices would be up 8 cents/litre. The AAA data shows a rise of 10 cents/litre in the average Sydney price.

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The Gradual Demise of the Compact Disc

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The Australian Recording Industry Association (ARIA), after taking a look at sales for the first half of 2008, has run crying poor to the Herald Sun. While they have not yet released these figures to the public, they presumably continue the trend evident in published figures for 2006 and 2007.

Australian Music Sales

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The Price of Carbon for Petrol

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Commenting on my petrol prices post, Mark Lauer suggested that excise on petrol should in fact be increased to deal with negative externalities:

Personally I think we should be increasing the excise. It represents the many negative externalities that car use in our society creates: carbon emissions, use of space for (larger) roads; materials, construction and maintenance of (larger) roads; particulate pollution; deaths and injuries from road accidents, and so on, all of which scale with mileage and hence fuel use. And our understanding of all these factors is moving in the direction of increased disutility. Hence the charges should be increased.

I’ve been thinking about petrol and carbon emissions a bit over the last few weeks, so this is as good a prompt as any to put down my thoughts here on the Mule. I should also point out that I have Mark to thank for the back of the envelope calculation that I’ll discuss here.

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Sydney Petrol Prices

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Soaring petrol prices have led to all sorts of calls for action to help reduce prices. The Opposition called for a 5 cents per litre reduction in the excise on petrol, which currently stands at 38.1 cents per litre. (See note below for an explanation of the strike-throughs). the abolition of the double taxation of petrol by eliminating Goods and Services Tax (GST) on petrol excise. Since the excise is currently 38.1 cents per litre, this would save 3.8 cents per litre. One Victorian Liberal MP, Chris Pearce, went further and called for a 10 cent reduction in petrol excise. The Rudd Government initially claimed that there was nothing more that they could do, but then buckled to the pressure and has proposed the introduction of a national FuelWatch scheme aimed at promoting price transparency at the bowser. The Minister for Competition Policy & Consumer Affairs, Chris Bowen, has indicated that this scheme is expected to save around 2 cents per litre. So, what is going on with petrol prices and what are the merits of these proposals?

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Retail Sales in New South Wales

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Yesterday the Sydney Morning Herald published an article on the latest retail sales numbers for New South Wales that contrasted the sales growth in take-away food and pubs and clubs with the decline in business for cafes, restaurants and fresh food retailers. This is put in the context of with rising mortgage rates and fuel prices, to suggest that consumer behaviour is starting to shift. The data is published by the Australian Bureau of Statistics, so I decided to dig a little deeper. Prompted by a comment over on the Junk Charts blog, I’ve used a table enriched with spark-lines rather than the heatmap I used in the inflation post.

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Anatomy of a Bubble

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The Joint Economic Committee is a standing committee of the US Congress is charged with reporting on US economic conditions. Needless to say, the Committee is making a close study of the financial turmoil triggered by the collapse in US house prices and rising delinquency rates among “sub-prime” borrowers. Recently Alex J. Pollock gave testimony to the Committee entitled “Regulatory Implications of the Housing and Mortgage Bubble and Bust”. Continue reading →

Why I Always Buy the Same Sandwich

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Until recently, I’d never given much thought to the fact that whenever I buy my lunch at the deli behind my office building, I always get the same sandwich (chicken, avocado, cheese, tomato and lettuce on multi-grain, in case you were wondering). Then I started reading Dan Ariely‘s book Predictably Irrational and realised that I’d been “self-herding”.

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