Australian fertility rates of around 1.88 babies per woman are quite high by developed country standards but still well below replacement fertility which many claim is around 2.1. Thus Australia could achieve ZPG simply by controlling the migration intake. The intake would still be non-negligible because Australia exports many residents each year who seek to return to their country of origin. The building industry claim that we need high rates of immigration to boost private investment in housing but this has always seemed to me to be a “tail wagging the dog” policy – housing investment should not be needed to keep the economy afloat. Housing should provide a place to live. The resources devoted to housing could instead be directed to education, leisure, improving the stock of existing housing and helping to deal with a population of existing people who will live longer. (more…)
November 28, 2013
November 27, 2013
I am unhappy with the recent forecasts of population doubling for Australia by 2100. Not with the forecasts themselves but with the fact that the forecasters have “sniffed the wind” correctly and sense that the Australian mania for continued population expansion will keep running until, presumably, we experience the diseconomies that such growth makes inevitable. I am uninterested in being the richest nation on earth if that means I have to live in an overcrowded, congested rubbish dump. (more…)
June 7, 2013
I am residing in a hotel at the entrance to the Central Southern Univerity of Forestry and Technology in Changsha, Hunan Province, China. I have been holding seminars and classes at the University and, about twice a day, sampling the excellent Hunannese cuisine – spicy hot but not as hot as Sichuan. It has been a pleasant stay. The students ask intersting questions – last night following a class on the economics of “optimal population” one young lady asked me (rather pointedly) how many children I thought she should have. China of course has a strict “one child” per family policy.
My response was the predictable one of a population economist. Population restrictions make sense when the environment is suffering because of market failures. If issues such as pollution, congestion and, indeed, public goods provision cannot be resolved efficiently then population controls make good sense. It is, of course, true that there are high transaction costs in controlling a family’s fertility but in a society that is developing as rapidly as China “first-best” pricing of the environment is also something difficult and which will take time. The general message is that the better society can address external costs the more it can rely on individual decision-making by households. When you express it in these terms the point seems almost obvious but I think many commentators on the population issue fail to see this commonsense view.
Good environmental policies and policies for efficiently delivering public goods can be a substitute for population controls and visa versa. Not a perfect substitute because there are extra gains from population increase when the environment is properly priced.
It is instructive to me to converse with students from different backgrounds. The Chinese students here ask very direct questions that put me on the spot so I learn. It is a fun part of being an academic.
November 20, 2012
I’ve used it before but, who cares, its my favourite Mill quote. Its about the most sensible general statement on “optimal population” and the need to co-exist with nature that I have come across. (more…)
August 3, 2011
These are the comments I made at a Productivity Commission Roundtable on a paper by Don Henry that was concerned with environmental population interactions. More generally I was concerned with synthesising a variety of approaches to this issue – from extreme libertarian ‘gains-from-trade’ arguments favouring a large population to extreme Malthusian arguments that supporters of the Green movement might endorse. The synthesis depends on the assumption one makes about how environmental assets are owned.
March 18, 2011
I’ve spilt a lot of printers ink on this topic over the years. Here is a draft of some notes I prepared for a Productivity Commission meeting next week. Comments welcome. (more…)
August 8, 2010
For the most part I have refrained from entering into the current discussions on migration and population targeting. My preferred approach to these issues – as an economist – is to recognise the potential for economic gains from migration and population increase and then to look for policies that guarantee resident Australians will be better off as a consequence of such changes.
Demographer Peter MacDonald from the ANU and I gave talks on these issues to the Faculty of Commerce, Leaders Forum at Melbourne University. The powerpoints for my talk are here.
July 22, 2010
Mark Crosby over at Core Economics has a post on population economics that created stress for me. Stress because it argues an intellectual position I (and many others) have being trying to combat for many years. (more…)
November 12, 2007
Bernard Salt’s Population Growth Report 2007 for KPMG (I could not yet find an online version) makes interesting reading. Melbourne has joined the ranks of Australia’s fastest growing capital cities with nearly double the growth rate of Sydney and close to the growth rates of boom cities like Perth and Brisbane. But the Queensland coastline still holds the centres with maximum population growth – Cairns in particular is growing at twice the rate of Brisbane.
With current growth rates Melbourne would be the largest city in Australia in 20 years – returning Melbourne to its 19th century status as Australia’s largest and most popular city. Of course these projections presuppose no change in relative housing costs which would be quite unrealistic.
Around Australia the main competition for rapidly growing coastal areas and for ‘sea changers’ comes from city centres. The trend is strong everywhere but particularly in Melbourne and Brisbane. Young couples are living in apartments close to city centres to minimise their commuting costs.
The standout area is Sydney where some municipalities (Campbelltown, Fairfield) actually lost people as young adults leave older parents to live elsewhere. Indeed Sydney’s centre continues to grow while its periphery is shedding people.
The experience Salt identifies correlates with quite a bit of experience. Melbourne property prices grew strongly last year while Sydney prices did not. Still Sydney property prices remain very high. I was struck by this headline in the Sydney Morning Herald yesterday while visiting – over the past year 570 government grants for first home buyers were given to people buying $1 million plus valued properties – a 44% increase over the previous year. It is a stunning figure.
My subjective feeling (no real evidence) is that Sydney housing on average is of higher quality than Melbourne’s – houses in Sydney have often been renovated several times and the physical beauty of Sydney as an urban setting is not arguable. Melbournians gloat about their beautiful gardens but Sydney, with its milder climate, has some of the best urban gardens I have seen anywhere.
My main objection to Sydney as a place to live, apart from housing costs, is the cost of making journeys by road. A visit to the local shopping centre can be a congested nightmare in many suburbs. My impression of the train and bus services in the city are however generally very positive. The exception that has impacted on me is on the far north side areas where public transport is almost non-existent late in the evening. On the other hand if I owned a house at Palm Beach I probably wouldn’t ever want to leave and would presumably have enough money that I could afford not to do so!