Posts by Jim Cathcart
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Polity: House-buying patterns in Auckland, in reply to BenWilson,
I have to say that it’s pretty amusing that in economics, “stress testing” doesn’t involve actually putting anything under stress. Their “stress testing” is modelling the scenario with a spreadsheet. If only I could do that for software I wrote, I’d pass every stress test ever. Of course it would fall over in practice.
Well....yeah. But you can also do stress testing in architectural and engineering design using simulated computer models. Sure, materials are stress tested (whew).
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Polity: House-buying patterns in Auckland, in reply to Clunking Fist,
"wouldn't it make more sense to more accurately weight the sample by characteristics such as age, income, etc"
Eh? It's not really a "sample" in the classical, technical sense. And the buyers weren't asked their age, nor their income: if the data aren't collected, then they can't be analysed.But it is. It's a non-random sample of property purchasers from a real estate agency. And I agree with you. The demographics are nothing more than speculation and "back of envelope" inferences from census data.
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From across the Tassie, "Have the property wars become racism’s new frontier?" Even a reference to Edward Said.
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Polity: House-buying patterns in Auckland, in reply to Marc C,
Ahhh....transparency of non-existent data. Oxymoronic? While that may come out as a recommendation from the MP, portraying foreign property investors in a poor light is cheap and nasty.
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Polity: House-buying patterns in Auckland, in reply to Marc C,
Well why doesn't Labor present the case in a more robust argument and refrain from framing non-resident Chinese as some kind of demon?
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Polity: House-buying patterns in Auckland, in reply to Katharine Moody,
<q>Talkie, my very first post on the original thread by Keith Ng was on the above (i.e., the REAL issue). I was stunned that the majority of posters ignored the economic issue/problem at the core of the matter and instead wanted to talk Labour politics instead – when political slight of hand by the governing National party is what prevents us from having this conversation with the REAL data in the first place.
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Ahem. I made an effort too. But what this is reflects is NZ’s preoccupation with identity politics. I understand middle NZ well enough to understand that people are quick to pounce on scapegoats who are perceived as being obtrusive to the status quo. That’s why I attempted to suggest that this is a much wider global issue steeped in the monetarist framework developed by the Anglospere. If you make the assumption that property prices are being driven by non-resident foreigners, why blame the foreigner who is making decisions based on their best interests and welcomed by the policies of the govt (regardless of political leaning) and the financial needs of the country? NZ would be an economic wasteland without these capital flows. An inconvenient truth that seems to be rarely raised or discussed.
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People think they're getting the probability of the null hypothesis, given the data, something they can understand, sort of. Instead, they get the probability of the data, given the null hypothesis (and a bunch of other assumptions that have to be checked).
Rejecting a null hypothesis following a standard research design is all very well, but this is not rejecting or supporting a hypothesis given that its directional at best and not statistically significant.
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Speaker: Identification strategy: Now…, in reply to BenWilson,
The number of times you have to explain what a p-value is, even to people with considerable mathematical competence, just shows how poor it is for what we really want stats to do.
I would argue that the p-values and significance should be understood by pretty much anyone involved in research. I've been involved in commercial research, and as a non-natural mathematician, it requires dedication and patience. I constantly review what most learnt in applied maths at high school, but never retained in their adult lives.
All I can see the researcher do is apply a probabilistic inference from population, Whether or not that qualifies as "Bayesian analysis" is beside the point. It wasn't very sophisticated. The readers of the Herald are likely to be much of what they read at face value so "it must be true."
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On the other hand, there literally aren't any other countries where the conditions are like those in China. The government's determination to hold down interest rates has made bank deposits and bonds relatively unattractive and credit so cheap that huge numbers of retail traders borrow money to buy shares in the two stock markets. There are trillions of dollars in capital and credit looking for places to go.
Actually, shadow banking in China is the only option for many when it comes to borrowing money. The scale is immense and its practices are oppressive. As for Chinese citizens being able to rely on saving by conservative instruments, it must be soul destroying watching others "get ahead." There are obvious similarities to what's happening in the West, including NZ, as we stagger from one asset bubble to the next.
I would even go so far as to say that it’s pretty reasonable that when looking at the proportion of probable Chinese names in the Labour Party dataset as compared with resident Chinese population size, and controlling (or weighting) for demographic and income factors alone, that the overrepresentation of Chinese people buying houses suggests that they are not all local residents.
Bayesian analysis is versatile and can be applied in different ways. Not sure why they could start with explaining the methodology and the assumptions used. Even the reference to 126,000 is annoying as it's obvious that the potential buyers / investors are a small sub-group of this population. Qualitatively, it would also be interesting to understand if this is part of a mass capital flight movement out of China, which eventually could pose far more grave problems for China and the global economy.
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Hot money is a dangerous thing for a small, open, export-reliant economy. And a tax regime that favours non-productive activities like property speculation is crazy. These are real political issues that I feel strongly about.
Actually, if we compare this with a washed up property market such as Tokyo, it's quite obvious that hot money knows no boundaries.
In Japan, sales to Chinese and Taiwan buyers jumped 70 percent higher in three months through March from the year-earlier period, or ¥11.1 billion ($90.8 million) at Sinyi Realty Inc., a Taiwanese brokerage with outlets in Japan. For every 100 new apartments sold, about 10 to 15 are to foreigners from Asia, according to Sinyi.
“I wouldn’t find a deal like this in China,” said Lin Huan, a 35-year programmer from China’s northeast Liaoning province, who with help from her parents bought a three-bedroom flat in the Shinbashi area of Tokyo for investment, paying the equivalent of $203,000. After recently relocating to Tokyo to work for an technology company, she noticed the weaker yen was making properties cheaper. She expects to make a 5 percent return on the rent annually, whereas property in Beijing yields just 2 percent.
Chinese buyers are typically purchasing in the 1 million to 2 million yuan ($161,000-$322,000) bracket, a range “tolerable to many Chinese,” said Gui Liangjing, SouFun’s international sales director in Beijing.
It’s not as tolerable to Japanese. Prices in Tokyo have become “seriously unaffordable,” the annual Demographia International Housing Affordability Survey shows. The percentage of Japanese in the seven biggest cities who wanted to buy a home dropped to 15.4 percent in December, the lowest level since Recruit Sumai Co. started surveying two years ago. Even though it rose to 18 percent in March, those who plan to “take action” by looking or buying declined, the survey showed.