On a low-ish turnout, the responses to last week's Fun Online Poll by Sunday lunchtime were fairly evenly split as follows:
What motivates NIMBYs?
They want to live in a nice house - 21 votes
They don't want anybody else to live in a nice house - 25 votes
At which stage I linked to it at Housepricecrash, and as at today's date the responses are:
They want to live in a nice house - 79 votes
They don't want anybody else to live in a nice house - 153 votes
So it goes to show, it not just how you ask the question but whom you ask that matters. FWIW, the second answer is clearly the correct one. As I always say, NIMBYs are like people who go abroad on holiday and then complain about all the tourists.
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Monday's Fun Online Poll was a bit obscure and got a correspondingly low turnout:
Housing is a 'normal good'
Agree - 19 votes
Disagree - 3 votes
1. This is a simple question of fact and observation. In the economic jargon, 'normal goods' are things on which people spend more money if they have higher incomes, as opposed to 'inferior goods' on which only low income people spend money. Normal goods in turn can be divided into 'necessities' on which budget share decreases with rising income (although rising in absolute terms) and 'luxuries' on which budget share increases with rising incomes.
2. As far as I can tell, housing is the most normal of normal goods, and (pensioners aside), the value of the house that any household occupies is very closely correlated with that household's total income. OT1H, there is a budget constraint (housing consumption restricted by ability to pay) but OTOH it's nice to have a nice house and there is the 'keeping up with the Joneses' factor (so consumption increases with ability to pay).
3. At current market values, I'd expect that for the vast majority of working households the value-to-income ratio is between four and six (my family 'over occupies' and we might even be slightly above six, but only slightly. Before we moved we were at a ratio of just under five).
4. So IMHO, whether we tax incomes or whether we tax the value of housing owned/occupied by working age households and businesses doesn't make much difference at all in the grander scheme of things. Businesses already pay a property value tax called 'Business Rates', so it'd just be a question of trebling that and scrapping corporation tax, VAT, Employer's NIC and so on - either way, the tax payable by businesses would go down enormously.
5. Sure, there would be winners and losers if we replaced all taxes with a flat tax on the value of land/buildings*, but don't forget that different types of income received by different types of people are taxed at wildly different rates of anywhere between 20% and 77%**, so if we took all these rates and taxed all income at a single flat rate instead (about 40% to 45%) there'd be just as many winners or losers (even though with a flatter, simpler income tax - even at a nominally high rate - the economy would run a lot better).
6. So it's the simplification that would create the winners and losers, not the shift from taxing incomes to taxing the value of land/buildings owned/occupied by businesses and working age households.
* For example, if the average overall tax rate is 40% and the average value-to-income ratio is 5, then we could replace the whole tax system with either a flat income tax of 40% or a flat property value tax of 8%.
** Even ignoring the much higher marginal rates faced by those subject to student loan repayments or pensioners and higher earners who lose part or all of their personal allowance above certain thresholds, let alone the 100% marginal rate faced by income support claimants or Pensions Credit claimants.
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Anyways.
The 'blogosphere seems to be very divided on what to think about that US preacher chappy Terry Jones who intends to commemorate the 9/11 terrrorist attacks by burning a Koran or two, for example:
Captain Ranty: ... burn every single copy of the Qu'ran. Burn them all today. The US Commander in Afghanistan says that the poxy pastors actions will put his troops in harms way. There is an answer to that. Pull them out. All of them. Today.
Longrider: A little bit of me almost admires this latest contender for the Darwin awards...
Adam Collyer: ... it sounds like a pretty foolish thing to do, really, given the potential inflammatory affects on the Middle East.
The Nameless Librarian: Oh, good golly gosh this sounds like a such a dumb fucking idea....
I personally can't see the harm, but let's throw it open to the crowd. Vote here or use the widget in the sidebar.
Wednesday 8 September 2010
Fun Online Polls: NIMBYs, Normal Goods & Burning The Koran
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8 comments:
I didn't play in the last game because I had some difficulty equating housing with "goods" in the context of the Engel curve.
The wiki extracts you quoted (and which I have no reason to doubt) said that the Engel curve suggests for "normal goods ... as income increases, the quantity demanded increases".
However one defines goods, the statement has two parts.
First, the quantity demanded by an individual can increase and, secondly, the number of individuals demanding it can increase.
Except in very rare instances, housing cannot fall into the first cetegory.
There is a further difference between housing and what would usually be called "goods", namely that demand is limited by circumstances unrelated to price to a greater extent than for other items.
You won't find many single people buying a four-bedroomed property just because their income has increased, nor will you often find a family with three late-teenage children moving from their three-bed semi to a five-bed detached just because they can afford it.
Buying a higher quality of stuff, be it housing or anything else, is an obvious consequence of increased income. But even then, once a home has been bought that is suitable to current (and anticipated future) needs and of a quality that is thought acceptable to someone of a certain income, there is little likelihood of change unless circumstances alter radically.
When it comes to stuff other than housing it is rather different, not least because the cost of dumping what you have and getting something better is so much less.
And we should never exclude or denigrate the emotional attachment people have to their homes. It has an effect on their willingness to move and, for those with such an attachment, makes housing anything other than normal goods.
TFB, housing is a "good". It's something that people save up for and spend money on. And the value of people's houses is fairly proportionate to their income.
You might as well have just posted your final paragraph (which is quite true) and left it at that.
But your contention that people don't move very often is not true. The average long-run number of purchases/sales per year is over a million. That means the average household owns/ocupies two or three houses in a lifetime. And when they move they will take their income and family size into account.
"FWIW, the second answer is clearly the correct one."
To you perhaps, but not to me. You imply that there is some absolute truth here which there manifestly is not, it is simply a matter of opinion. The fact that the actions of NIMBYs have the tendency to deny others the opportunity to live in a "nice" house in no way proves that that is their intention - go down that line and there would be no offence of manslaughter, it would always be murder.
"You won't find many single people buying a four-bedroomed property just because their income has increased, nor will you often find a family with three late-teenage children moving from their three-bed semi to a five-bed detached just because they can afford it. " says TheFatBigot.
Well, yes. That's because those potential scenarios are rare to begin with.
You won't find many single people able to afford a four-bedroomed property at all, let alone have an income that allows the indulgence. Looking at other normal goods, you won't find many people whose alcohol intake goes up by a factor of ten in a first job after university. I still tend to only eat three meals a day. There's no need for normal goods to be addictive - people buy more until their appetite is satisfied, not until the money runs out.
The family example is ridiculous as well. Amazing as it may seem to the Bigot, most people are able to predict the presence of 3 late stage teenagers in their household 15 years before it happens. Incomes rise gradually at that stage in life, so the decision about purchasing a 5 bed was made as long as a decade earlier. And you will find many families indeed buy a house with rooms for everyone plus a guest if they can afford it.
Is the fat bigot angry because reality is offensive to him?
Regarding emotional attachment - people should always be treated fairly, yes. But a mature human being does not use their emotions as an excuse. It's enough work wading through nonsensical arguments without giving selfish people the catch all "but you're hurting my feelings" card as well.
B, it IS true. Human nature is unfortunately not just that individuals want to be well off, they want to be better off than their peers as well.
Jon, thanks for back up and real life examples. I would have assumed that what you say is blidingly obvious to everyone, but obviously not :-(
"Human nature is unfortunately not just that individuals want to be well off, they want to be better off than their peers as well."
Only some people do. I, for example, don't, nor does anyone in my (admittedly small) circle of friends and colleagues. The number of people I have come across in my life who I know to be like that is also vanishingly small. Perhaps you are plagued with Hyacinth Bucket-like neighbours, I certainly am not. Who knows if these people are a majority or minority, especially in NIMBYdom?
B: "Perhaps you are plagued with Hyacinth Bucket-like neighbours."
Not just neighbours, but most people I talk to (or hear talking), they're all against new development of anything. If it weren't 'most people' then all the political parties wouldn't be pandering to them and waffling on about Britain being overcrowded, Hallowed Green Belt etc.
I've yet to hear of a group of angry local residents standing in fron of the Town Hall with placards saying "Our children need somewhere to live!"
"Not just neighbours, but most people I talk to (or hear talking), they're all against new development of anything."
But that's just proof of stasism (the golden age etc etc), not of malevolent one-upmanship.
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