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The Living Standards, Incomes and Accommodation Costs of Older New Zealanders Revisited


  • Roger Hurnard
  • Dean Hyslop
  • Ivan Tuckwell

    () (New Zealand Treasury)


In 2001 the then Ministry of Social Policy published a comprehensive study of the living standards of older New Zealanders. The current paper revisits the estimated relationship between material well-being and the current income and accommodation costs of older people, and questions the extent to which income and accommodation costs directly affect well-being or proxy for other factors. We first extend the estimated relationship between material well-being and current income to include the source of the income as well as its level. We find that controlling for different income sources roughly halves the estimated associative effect of income on material well-being. Furthermore, for a given level of income, those with higher fractions of either employment earnings or capital investment income have significantly higher material well-being scores, while those with a higher fraction of income from benefit allowances have lower scores. One interpretation is that these factors may proxy for other causal factors, such as health and wealth effects, rather than reflecting a direct income effect. Next, we extend the original specification between material well-being and accommodation costs to, first, include property rates as an accommodation cost and, second, to control for the type of housing tenure (freehold homeowner, mortgaged, renter, and no accommodation costs). We find that, controlling for housing tenure, the estimated effect of accommodation costs (including rates) is, at most, half that originally estimated and, for some specifications, insignificantly different from zero. Furthermore, controlling for the level of accommodation costs, mortgage holders and renters have significantly lower material well-being scores than freehold homeowners. These findings suggest that understanding what influences the material well-being outcomes of older people is not as straightforward as might be suggested by the simple association of certain variables.

Suggested Citation

  • Roger Hurnard & Dean Hyslop & Ivan Tuckwell, 2005. "The Living Standards, Incomes and Accommodation Costs of Older New Zealanders Revisited," Treasury Working Paper Series 05/03, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:05/03

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    References listed on IDEAS

    1. Suzi Kerr, 2003. "Allocating Risks in a Domestic Greenhouse Gas Trading System," Others 0309003, EconWPA.
    2. Goulder, Lawrence H. & Parry, Ian W. H. & Williams III, Roberton C. & Burtraw, Dallas, 1999. "The cost-effectiveness of alternative instruments for environmental protection in a second-best setting," Journal of Public Economics, Elsevier, vol. 72(3), pages 329-360, June.
    3. Cramton, Peter & Kerr, Suzi, 2002. "Tradeable carbon permit auctions: How and why to auction not grandfather," Energy Policy, Elsevier, vol. 30(4), pages 333-345, March.
    4. Suzi Kerr & Emma Brunton & Ralph Chapman, 2004. "Policy to Encourage Carbon Sequestration in Plantation Forests," Working Papers 04_05, Motu Economic and Public Policy Research.
    5. Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-378, June.
    6. Suzi Kerr, 2003. "Indigenous Forests and Forest Sink Policy in New Zealand," Working Papers 03_15, Motu Economic and Public Policy Research.
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    More about this item


    Living standards; material well-being; current income; accommodation costs;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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