"Bad times, hard times, this is what people keep saying; but let us live well, and times shall be good. We are the times: Such as we are, such are the times."



Wednesday, 18 December 2013

WEEKEND READING: 21-22 DECEMBER


  1. Reporters without Borders have published their 2013 World Press Freedom Index report. Greece is in freefall, sandwiched between Kosovo and Togo at 84th place, down from 70th last year. Reporters without Borders' mini-site on Greece is dated, but interesting nonetheless.
  2. A new paper by IMF researchers measures different countries' efforts to bring in tax revenue. Greece ranked high by global standards in 2011 (higher than, say, Canada) but lower than most core EU countries. Once again, revenues in excess of 43% of GDP turn out to be impossible. Note the similarity in estimates of maximum revenue between the paper I review here (42.7%) and this paper (42.4%), even though the methodologies are completely different. 
  3. On that same topic, the OECD releases its latest figures on tax revenues in the OECD countries, noting Greece's 'progress' in increasing revenue.
  4. The World Bank's researchers continue to plug away at the issue of global income inequality with a new paper. This one finds that the change in global income distribution since the 80s is essentially a swap of income between Western middle classes and Asian middle-classes. Presumably if Africa should ever get its act together we'll have another round of this.The paper also finds that, after accounting for the rising incomes of the super-rich (which are largely missing from household surveys and must be extrapolated from power laws), global inequality has remained almost unchanged since the 80s.
  5. The IMF's researchers are doing a Naomi Klein tribute this week, first with a paper that links income inequality and financial instability, and then with a paper on the redistributive aspects of financial regulation.
  6. But the opposite is also true: a very good research piece has also come out this week revisiting the Reinhart & Rogoff debate with what I think is amazing rigour; the authors find what they call 'tentantive' evidence that debt slows down long-term growth, but also find that it's pointless to expect a single threshold to signal the onset of debt overhang across all countries, and that the relationship between debt and growth is non-linear across countries, though probably linear within countries.
  7. Still with the IMF - this new paper suggests that countries can usually only sustain massive public debt loads because if their reliance on 'real money investors': central banks (foreign and domestic) and domestic non-financials, presumably including households. 
  8. Somewhere in a parallel universe, the UK Office for National Statistics explains the rationale behind the reclassification of Network Rail as a Central Government Entity, and the head of the agency is not accused of treason by illiterate trolls. Sigh.

Tuesday, 17 December 2013

YOU TRIPPIN? NOTES ON GREECE'S HOUSEHOLD CONSUMPTION DATA

Ever wondered what the fastest growing category of consumption is in post-crisis Greece?

Well it's the same one as in pre-crisis Greece. Drugs. Reports of 'sisa' scything through the streets of Athens, booming HIV infection rates among injecting users and the setting up of Greece's first supervised consumption room back in November may have given observers the impression that drugs are confined to the fringes of Greek society.

The fact, however, is that the formal household sector is chasing highs too, and has been for years. Only in three out of the last eleven years have Greek households failed to clock up a double-digit increase in the use of 'narcotics' as defined here, with the total amount spent in 2011 equal to roughly EUR1.2bn (or EUR110 per person) in 2010 prices.

What you can see from the graph to the right, however, is that consumption growth was in freefall pre-crisis, and the trend has reversed since, despite (or possibly because of) falling incomes.

The figures, however, are confusing in several ways. For one, Greece appears to be better at collecting data on narcotics-related spending than any other country in the EU. You can see for yourselves - most countries are unable to publish figures, and those that do, publish unrealistically low figures anyway. Going by Eurostat's figures, Greece alone accounts for half of the EU's drugs consumption. Frankly, that is impossible.

On the flip side, Greece's own figures may be inaccurate too. 100 Euros' worth of drugs for every man, woman and child sounds a bit high, particularly so when one realises that regular drug users are in fact quite rare. In Greece, for instance, only about 15% of high school age boys and 7% of girls had ever used any illicit drugs in 2011 (data here). The figures are quite similar for adults, with recent users making up nearly half of all lifetime users (data here). So if, say, about 5% of the population (allowing for under-reporting) are responsible for 90% of the total spend, that means they would each spend about EUR2,000 per year on their habits. It's possible, but it's a big stretch - and in 2011 no less. Remember, these are people upstanding enough to sit through a household consumption questionnaire. A real problem user wouldn't be able to sit through that without a fix of something, I doubt I would either.

The consumption data of course come from Household Budget Surveys (HBS) run by national statistics agencies such as Greece's ELSTAT. Harmonisation and comparability are, unlike with some other datasets, not a huge priority, so it pays to look at the original questionnaire and methodology. In the case of Greece, you can check out the full documentation of the latest survey round (2011) here or a more complete version (with questionnaires) in Greek here. What really stands out to me is that none of the questionnaires actually include any explicit questions on the use of narcotics - which makes sense. But in that case, ELSTAT must literally be relying on respondents to volunteer information about their drug habits, and they must be much more willing to do so than their fellow Europeans.

Time to snoop around a little.

TO BE CONTINUED