Diffusion of consumer durables to poor American households since 1984

We do not have air-conditioning. Do not know many people who do but New Zealand does have a temperate climate. But if you are down and out in America you still have air-conditioning.


Sources: The Economic Condition of Poor Americans (and the rest of us) Continues to Improve – Coordination Problem and Well-Being – Extended Measures of Well-being: Living Conditions in the United States, 2011 – People and Households – U.S. Census Bureau.

In the 2000s, dishwashers, air conditioning and microwaves were still diffusing rapidly in poor households in addition to the usual digital goods.

To make it even worse, despite the ravages of the 1996 US federal welfare reforms and a top 1% who apparently kept for themselves 90% of all income gains since the 1970s, air-conditioning in poor houses increased by 50% or so between 1994 and 2004.

Imagine how many more poor households would have dishwashers, air-conditioning, microwaves and digital goods but for the top 1%. Not that many actually because most of them already have those consumer durables despite their income not increasing for several decades.

I always puzzle over these who claim that incomes of ordinary families have not increased since the 1970s because that implies you can only buy the same basket of goods and same quality of goods as in the 1970s. That is what no real income growth means. You cannot buy more than before.

Fast Car – Tracy Chapman: the trap of intergenerational poverty

Poverty in America after 20 years of welfare reform


Source: Did Welfare Reform Increase Extreme Poverty in the United States?


Source: Did Welfare Reform Increase Extreme Poverty in the United States?

Doug Allen on same-sex divorce

Doug Allen argues that marriage is an institution designed and evolved to regulate incentive problems that arise between a man and a woman over the life cycle of procreation.

The real problem with same-sex marriage is same-sex divorce according to Allen. Marriage includes a set of exit provisions in terms of the possible grounds for divorce, rules for splitting property, alimony and child support rules, and custody rules. Allen also argues that:

  1. Many institutional rules within marriage are designed to restrict males from exploiting the specific investments women must make upfront in child bearing;
  2. Since same-sex marriages are not based as often on procreation, these restrictions are likely to be objected to and challenged in courts and legislatures;
  3. To the extent divorce laws are changed, they may hurt heterosexual marriages, and women in particular; and
  4. Given that same-sex relationships are often made up of two financially independent individuals, there will be litigation and political pressures for even easier divorce laws since the problem of financial dependency will be reduced.

Alterations in divorce laws to deal with issues of same-sex divorce necessarily apply to heterosexuals, and these new laws may not be optimal for heterosexuals, making marriage a more fragile institution for them. The actual outcomes of no-fault divorce laws, as an example, could hardly have been more different than what was expected and intended. The most obvious outcome was large increases in divorce rates.

No fault divorce laws influenced the rate at which women entered the workforce, the amount of hours worked in a week, the incidence of spousal abuse, the feminisation of poverty, and the age at which people married. No-fault divorce influenced a series of other laws related to spousal and child support, child custody, joint parenting, and the definition of marital property.

Marriage may provide a poor match for the incentive problems that arise in the relationships of gay and lesbian couples. Doug Allen is also of the view that putting all three relationships under the same law could lead to a sub-optimal law for all three types of marriages.

Allen in summary argues that marriage is an economically efficient institution moulded around the long-term interdependencies of child-rearing heterosexuals. He argues that homosexuals wishing to marry would be better served by a separate, gay-specific form of marriage.

I forgot to mention second wives clubs which lobby for limits the length of time of alimony to the first wife. The British 2nd Wives club in their legal advice page starts with these points:

  • Do you need to disclose your income or assets to an ex-wife?
  • Should your income be taken into account when assessing child maintenance?
  • Should child maintenance change when you and your husband have children of your own?

2nd wives clubs are natural allies for higher income gay divorcees wanting to pay less alimony. Nothing I have sent here is an argument against same-sex marriage willing as long as you are willing to live with the fact that it may have a few unintended consequences.

More on homelessness fell under @NZNationalParty? @CarmelSepuloni @cjsbishop

I cherry picked my previous data on homelessness if the New Zealand sub-Reddit is to be believed and from which I am banned and cannot reply. Plotting the data in full is to cherry pick it. The chart below is simply the first two rows of the source data. The subsequent rows deal with those in emergency accommodation and in temporary accommodation.


Source: 24 August 2016, Most homeless people working or studying, News, University of Otago, New Zealand, table 4.

When I shared this data on Carmel Sepuloni MP’s Facebook page, she rightly and constructively said

Thanks for your comment Jim. Unfortunately the number living rough has increased since 2001. We want to focus on improving the future, which is why we are holding our homeless inquiries so we can best understand and address this issue:

Rather than pointscoring, the issue is what to do to fix the problem. How desperate is much of the rest of the Left to beat up this issue as the fault of John Key. This is an an important issue that should not be used for point scoring by sufferers of John Key derangement syndrome.

Homeless people are those who I charted above. They are sleeping rough or in a car. They have slipped through the social safety net which is obviously not working for them. If you are in emergency accommodation, the social safety net is working. The issue is making that safety net work better in terms of moving quickly into more permanent accommodation..

Poverty Has Declined a Lot Over the Past 30 Years in the USA


Source: Poverty Has Declined a Lot Over the Past 30 Years | Mother Jones from Poverty After Welfare Reform | Manhattan Institute.

How many of the 41,000 homeless don’t have a roof over their heads? @metiria @PhilTwyford

There is a difference between not having a roof over your head and being in emergency or temporary accommodation. It disrespects those who lack a roof over their head tonight to equate their grave misfortune with those fortunate enough to already be in emergency accommodation. Once they are in emergency accommodation, that shows that the system is working. Finding them somewhere to stay pending finding something more permanent.


Source: 24 August 2016, Most homeless people working or studying, News, University of Otago, New Zealand, table 4.


But @EleanorAingeRoy child poverty has not changed much in 20 years

Today in the Guardian writing on trends in family poverty New Zealand, Eleanor Roy said that

The fact that twice as many children now live below the poverty line than did in 1984 has become New Zealand’s most shameful statistic.

Roy goes back to the 1980s as her base because child poverty has not gone up or down by that much since that sharp rise in the late 1980s.

Child poverty among single-parent households has doubled since 1990 and tripled since 1988. Poverty in families with two parents present is not much higher now than it was in 1988. 


Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), Table H.4.

Child poverty rates among single-parent families that live with other adults is one-quarter that of single-parent families who live alone. The reasons behind that should be explored more by those concerned with child poverty.


Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2013 – Ministry of Social Development, Wellington (2014), Tables F.6 and F.7.

The evidence is overwhelming that the main driver of the increases in the child poverty since the 1980s is rising housing costs.

In the longer run, after housing costs child poverty rates in 2013 were close to double what they were in the late 1980s mainly because housing costs in 2013 were much higher relative to income than they were in the late 1980s.

– Bryan Perry, 2014 Household Incomes Report – Key Findings. Ministry of Social Development (July 2014).

Any policy to reduce child poverty must increase the supply of houses by reducing regulatory restrictions on the supply of land.

Rather than blame the callousness of government in accepting higher rates of child poverty, Roy should blame its inability to take on the restrictions on land supply in the Resource Management Act that drive up housing costs for the poor. Increased child poverty in New Zealand is a by-product of housing unaffordability.