Yay – Herald does a fact check

February 20th, 2013 at 2:00 pm by David Farrar

Amelia Wade in the reports:

are not becoming more expensive as the increase in cost tracks the rate of inflation, an economist says.

The cost of a basket of fruit and vegetables has increased by 14.2 per cent in five years, according to Statistics New Zealand data requested by theHerald.

The Consumers Price Index – a measure of inflation – has jumped 15.7 per cent over the same period.

Shamubeel Eaqub, principal economist at the NZ Institute of Economic Research, said the rising cost of food often inspired emotive reactions.

“When you look at these issues, you sort of need to step back a bit.”

Mr Eaqub said food prices were not becoming more unaffordable. Since 2000, the average hourly wage had risen by about 50 per cent while food prices had risen about 30 per cent, he said. “Typically speaking wages will rise quicker than the cost of living.

Good to see the Herald doing stories like this, rather than just reporting a lobby group calling for GST to come off fruit and vegetables.

Note on Sunday I also blogged on this issue.

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15 Responses to “Yay – Herald does a fact check”

  1. Cunningham (846 comments) says:

    I almost fell over when I saw this. Amazing and great to see the media actually report both sides of the story.

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  2. redeye (630 comments) says:

    Yeah as a food grower I can confirm, everything is rising faster than our returns.

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  3. Elaycee (4,409 comments) says:

    ……Herald does a fact check

    Wow! Blow me over with a feather….

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  4. Alan Wilkinson (1,889 comments) says:

    Don’t celebrate. The Herald has now used up its fact checking budget for the year. In fact it was an accident that is unlikely to be repeated. They rang an economist expecting the usual Gareth Morgan top of the head bombast and the bugger checked out the facts instead.

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  5. nasska (11,808 comments) says:

    Mr Eaqub’s days are numbered. If the commission of enquiry the Greens are bound to call for doesn’t overturn these statistics then they will likely call for jihad. https://www.dropbox.com/s/9xbcqrs167cvi84/lovejoy.png

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  6. greenjacket (486 comments) says:

    Herald journalist fact checks rather than just repeats claims – well there has to be a first time.
    Amelia Wade’s colleagues must be looking at her like she has done something strange.

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  7. ross69 (3,652 comments) says:

    In fact, food prices have risen almost 6% in the last year. I’m not sure too many wage earners have gotten 6% wage rises. Pity the Herald, and Mr Eaqub didn’t fact check a little better.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10866614

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  8. SPC (5,775 comments) says:

    The use of the average wage for comparison is the part that is misleading.

    The impact of rising costs on people will be different dependent on their spending spread – necessities to discretionary. The high dollar lowers only the impact of the latter (imports).

    The main determinant of the average rise was the rise in the MW (less than $5 in 1999) at the bottom and the higher end.

    The key number is the median wage – and its increase over the period. Compared to a basket of necessity costs – like food, power and rent or rates/insurance/mortgage.

    Of course some around the median have been helped by WFF – but they really needed it because there the rate of increase has not been as much as the average.

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  9. David Farrar (1,902 comments) says:

    Ross – get your facts right. Food prices have in fact risen just 0.8% in the last 12 months.

    Fruit and vegetables have increased 5.8% in the last year, but almost no increase for the three years before that. They have increased 8.4% in total over four years.

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  10. SPC (5,775 comments) says:

    The link Ross 69 used says a 5.8/6% increase in “fruit and vegetable” prices.

    Presumably because this was originally a story about lobbying for GST off fruit and vegetables purchases by consumers.

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  11. SPC (5,775 comments) says:

    Anyone note that the economist says that wages typically rise faster than the cost of living, but makes no mention that the biggest cost, buying a property, is not assessed in the cost of living.

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  12. SPC (5,775 comments) says:

    Statistically for existing homeowners the situation is now good – but will worsen dramatically (higher mortgage rates) meaning any recovery will come at a cost for discretionary spending. But none of this anticipated to be large increase in homeownership cost will be accounted for in the official cost of living.

    Incorporating property in cost of living statistics is vital to represent the real position of wage earners and families, but the aggregate data reapplied as an average could be misleading – as circumstances will be different (such as levels of equity and debt).

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  13. tamati (75 comments) says:

    Th economists also ignore that people are able to change their buying patterns in response to changes in food prices. Thus the CPI and food prices indes generally both OVERestimates the actual cost to consumers.

    Eg. Price of Oranges goes up? Buy Apples.

    Price of fish to much? Buy chicken.

    The two index assume people buy exactly the same food, in practise nobody does this.

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  14. Sector 7g (242 comments) says:

    I agree with DPF on this one. New Zealand is doing so well under a National Government.
    It was obvious to me on a recent trip that the cost to live in New Zealand was one of the lowest in the world.
    Wages were massive.
    Unemployment was unheard of.
    Food was so cheap that everyone had cupboards full of food.
    Everyone i talked to had so much money they didn’t know what to do with it.
    Everyone was so well off that they could fly around the world with their family enjoying the time spent together.

    You could tell from the look of the place that companies were making huge profits, so much that nearly everyone i knew that used to just buy houses at inflated costs before selling them for even higher inflated costs were now interested in investing in business and creating jobs. It was obvious to me that the reduction of red tape and taxes had caused this.

    Well done DPF and National.

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  15. Redbaiter (9,604 comments) says:

    Its just one more great Marxist success story Sector7g.

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