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Publication Open Access An analysis of factors which cause job-satisfaction or dissatisfaction among farm workers in New Zealand(Lincoln College. Agricultural Economics Research Unit., 1968) Cant, R. G.; Woods, Mary J.This study is set in the context of the New Zealand farm labour situation and is designed to identify and measure factors which make farm employees satisfied or dissatisfied with their employment. It draws on the methods and results of a study by the industrial psychologist Herzberg and adapts this into an experimental framework which permits the use of group questionnaires and multivariate statistical analysis. The data were collected in June 1966 when questionnaires were administered to eighty Lincoln College students who had completed a two and a half year period of pre-entry farm training.Publication Open Access Capital formation in New Zealand manufacturing industries 1910 to 1964(Lincoln University. Agricultural Economics Research Unit., 1968) Francis, T. W.This paper reports on the results of a project undertaken to measure the stock of capital employed in New Zealand manufacturing industry over the period 1910 to 1964. Various concepts are proposed in the economic literature to measure different aspects of capital, but each concept in its empirical evaluation is beset with problems. Economic development, however, has become of such general concern that no matter how difficult may be the problems of dealing empirically with something called 'capital', it is important to try. Some of the difficulties involved in an empirical investigation of capital are discussed in Part III of this paper. The measure of capital presented in this report is the market value of tangible reproducible capital employed by manufacturing industries during the last half century. The Report on Statistics of Industrial Production provides the basic data for this study. The Report is compiled from factory schedules completed each year by every factory in New Zealand engaged in manufacturing. A discussion of the statistics on capital expenditures contained in the Report, and the adjustments which must be made, is given in Part IV. In Part V, the method is described in detail, and is followed by the results. Parts III, IV and V are presented principally for those readers who may wish to study the capital estimates in detail. Other readers will possibly find the brief summary presented in Part II sufficient for their purpose, and so can proceed directly to the tables themselves. The tables give estimates of the market value of equipment, land and buildings employed by manufacturing industries. Expenditure on capital assets, whether or not such expenditure adds immediately to productive capacity, is simply referred to as 'wealth' formation, and is to be distinguished from 'capacity' formation, the increase in productive capacity which ultimately results from wealth formation. That is, capacity formation is the value of capital assets actually 'coming on stream' in the production period.Publication Open Access The application of linear programming to problems of national economic policy in New Zealand(Lincoln College. Agricultural Economics Research Unit., 1971) O'Malley, T. R.This study is part of the Lincoln interindustry research programme. Using the same basic interindustry data the task will be to determine the maximum amount of consumption which can be achieved in the target year. Rather than choosing a vector of consumption targets and using the interindustry relationships to compute a structure which will be the basis for economic policy, the aim is to use linear programming to calculate the structure which will give the greatest level of consumption that the availability of resources will allow. Not only will this method serve as a useful comparison with earlier work, but the linear programming technique gives greater flexibility to the model builder than the traditional Leontief input-output system. In particular the Leontief assumption that each sector produces one, distinct, homogeneous commodity can be relaxed. Thus it is possible to have each of two activities producing the same commodity so that the system can choose between alternative sources of supply. It is also possible to make allowance for diminishing returns by specifying maximum levels for activities so that more of the, same commodity can be produced only by an activity which has a larger requirement of scarce inputs. The scope of this study will be restricted mainly to maximising consumption so that the linear programming solution can be compared with the earlier projections, and there will be only a limited exposition of the ways in which choice can be introduced into an interindustry model. However, it is hoped that the way will be made clear for the formulation of more adventurous programming models of the New Zealand economy.Publication Open Access Land development by Government 1945-69(Lincoln College. Agricultural Economics Research Unit., 1971) Plunkett, H. J.From the earliest European settlement in New Zealand the wealth of the country has depended heavily upon agriculture. With a lack of useful mineral resources, small population, isolation from markets, moist temperate climate and relative abundance of land, the country's comparative advantage in international trade has centred on the production of bulky, low cost agricultural products. That this is still true is illustrated by the National Development Conference's Targets Committee projecting that over 50 per cent of the increased exports necessary for the country's continued economic growth is to come from agriculture; the sector already providing over 75 per cent of the country's exports. Although the major proportion of these exports is to come from the intensification of existing farms, a considerable increment of output will be contributed by the Government continuing its current level of operations in developing farms from existing agriculturally unproductive land. It is not the aim of this study to see whether or not the Government should extend or contract these activities. The aim of the study is rather to review past operations in this field to establish a sound base for an intelligent analysis of this particular activity of Government in New Zealand. In this study an attempt was made to ascertain the costs and profitability of creating new farms from New Zealand's agriculturally unproductive land. This form of land development is considered as an alternative to land development on existing farms as a means of increasing agricultural production. In this research project the author has analysed all the completed long-term agricultural development projects undertaken by the Lands and Survey Department since the war and assessed their profitability in terms of present values and the internal rate of return.Publication Open Access Consumer demand for beef in the E. E. C.(Lincoln College. Agricultural Economics Research Unit., 1971) Hannah, A. C.In the negotiations connected with Britain' s entry into the E. E. C., New Zealand possesses very little true bargaining power. The only advantage we can use is to be better informed than the other side about the structure and economics of the E. E. C. market for products with which we are vitally concerned. Apart from presenting detailed results for a number of econometric models relating to each of the five main E. E. C. countries, the author also gives a large amount of information on the market structure for meat in each of the countries; and he has also brought together all the relevant meat production, consumption and price data, and for this reason alone we hope the paper will prove useful for reference purposes. The object of this study has been to try and quantify the relative effects of price and income on E.E.C. demand for beef in order to yield coefficients which might be used in later projection work.Publication Open Access An application of demand theory in projecting New Zealand retail consumption(Lincoln College. Agricultural Economics Research Unit., 1966) Court, R. H.The increasing emphasis on economic planning in recent years has made it important that planners and policy-makers should know, or at least have some idea of, the likely future courses of leading economic variables. This paper is a study of retail trading in New Zealand and its object is to explain, and produce projections of, domestic consumption of certain commodity groups at the retail level, and also for all groups as a whole. The individual commodity groups, chosen on grounds of general interest, data availability and computational feasibility, are called (1) meat, (2) other food, (3) apparel, (4) household operation and (5) miscellaneous. Point projections and tolerance limits in both real and current value terms are given for 1970 and 1975 for each individual group and for the aggregate of the groups. Some short-term forecasts are also given to show the possible usefulness of the projection method in this direction.Publication Open Access The theory and estimation of Engel curves: some estimates for meat in New Zealand(Lincoln College. Agricultural Economics Research Unit., 1970) Yandle, C. A.This paper is one of a series based on original research conducted by Christopher Yandle at Lincoln on the New Zealand Meat Market. In the course of this work the author conducted a questionaire survey of 300 families in Christchurch in which heads of families were asked to indicate their basic preferences for different meats, and to record their actual expenditure on meat along with family income for a given week. This paper deals at a more technical level with the analysis of this data in particular with the derivative of Engel Curves showing the relationship between consumers incomes and their purchases of meat. The subject is the estimation of Engel curves from survey data. A review is made of the appropriate economic theory, and the application of that theory to market generated data.Publication Open Access The effect of taxation method on post-tax income variability(Lincoln College. Agricultural Economics Research Unit., 1970) McArthur, A. T. G.Income variability is one of the serious disadvantages of farming. It makes it difficult to organize farm development wisely and upsets the farm family's standard of living. In the past there have been boom years when farmers have spent wastefully to prevent windfall gains being lost to the farm in taxation. In years of low farm income it may be difficult to carry on a development plan started in better times and thus not exploit past investment. Moreover few farming families have the liquid reserves to see them over bad seasons and it is customary for banks and stock and station agents to carry their clients over bad seasons. Farmers have to "draw their horns in" too. Development ceases, holidays are foregone, and teenage children may be brought home from boarding school following a difficult season. In the past New Zealand agricultural policy has aimed to reduce the fluctuations in farm income. The guaranteed price for butterfat and the floor price for wool are examples of policy aimed at reducing price fluctuations and the drought relief scheme is an example ameliorating the results of technical uncertainty. The Income Tax Assessment Act of 1957 which introduced the pay-as-you-earn method of paying income tax encourages a system which increases rather than decreases the variation in post-tax income a reversal of previous policy. The Act provided for provisional and terminal taxation. Terminal taxation is the difference between the provisional tax paid in the previous year and the tax which should have been paid. This annual square up, which can be a refund of an overpayment or a demand for underpayment, adds extra variation to a farmer's post-tax income compared with the method of tax assessment before 1957. The Tax Department and accountants encourage farmers to base, provisional tax on the previous year's income and this, in conjunction with terminal tax, results in three years' income having an influence post-tax income as will be explained later. While farmers and other businessmen are well aware of the adverse effects on post-tax income variation of provisional and terminal tax, the author has, not found any quantitative investigational work done in this field. Consequently this paper describes the provisions for paying tax under the existing taxation legislation in New Zealand and outlines some alternative methods. The use of the standard deviation as a measure of income variability is described. Then follows a case study in which the implications of these taxation methods are evaluated using pre-tax incomes from Lincoln College's Ashley Dene farm over a 16 year period. Finally, general analytical methods are developed for calculating the variance of post-tax income. These methods treat pre-tax income as a random variable. This makes it possible to predict the standard deviation of post-tax income under a wide range of conditions and to draw more general conclusions than is possible from a case study.Publication Open Access Trends in rural land prices in New Zealand 1954-1969(Lincoln College. Agricultural Economics Research Unit., 1971) Johnson, R. W. M.This paper examines post-war trends in rural land prices. New Zealand has a freehold system of land tenure and a land registration system based on the Torrens system first used in South Australia. As a result, reliable records are available of all rural land transactions for some considerable period of time. The paper examines an entirely new representative series of rural land market values for the period 1954 to 1969, based on official records and explores in detail, economic changes in the aggregate rural land market over this period. Readers will be interested particularly in the relationship between the market price of land and expected income. Land buyers are shown to discount increases in income at a relatively high interest rate and thus hedge against possible future fluctuations in farming income, while at the same time accepting lower average returns than in the immediate post-war years.Publication Open Access The optimal use by farmers of the income equalisation scheme(Lincoln College. Agricultural Economics Research Unit., 1971-12) McArthur, A. T. G.A progressive income tax penalises those taxpayers with a fluctuating income (for example, farmers), as compared with those on a stable income with the same average. However there are various methods of smoothing taxable income and hence reducing average tax payments. One such scheme is the Income Equalisation Scheme which was proposed by the Taxation Working Party of the Agricultural Development Conference in 1965 and was subsequently adopted by the Government. Under this scheme a farmer can deposit up to a quarter of his income from one year in the Income Equalisation Fund. He must withdraw a deposit within five years, adding the withdrawal to his income for that year. However, using the Income Equalisation Scheme has an opportunity cost, an opportunity foregone elsewhere. The funds deposited with the Government earn no interest. A thousand dollars deposited in the Fund for a year could have reduced a farmer’s overdraft with his bank by that amount, saving him about $75, In deciding how best to use the Income Equalisation Scheme to smooth taxable incomes, the tax saving gain from a smoother income must be balanced against the opportunity cost of storing the income in the Equalisation Fund. This paper describes a method for farmers and their advisers for making optimal use of the Income Equalisation Scheme. Optimal is defined as the maximisation of the present value of post-tax incomes. However readers should be aware that the scheme is of little value in reducing tax payments unless the farmer’s income is highly variable. In presenting the method which involves dynamic programming, the mathematics has been put in appendices so that the paper can be followed by those not skilled in mathematical techniques. The paper is divided into four sections. Firstly, a method of estimating farm income variability is given. Secondly, a method is presented for estimating the extra tax paid because of a fluctuating income. Thirdly, the results of using the Income Equalisation Scheme on historical incomes from Lincoln College's Ashley Dene farm are discussed. Finally, the rules for making optimal use of the Income Equalisation Scheme under realistic circumstances are presented.Publication Open Access A linear programming model for economic planning in New Zealand(Lincoln College. Agricultural Economics Research Unit., 1972-11) O'Malley, T. R.A good deal of research into the likely future structure of the New Zealand economy has been carried out in the Agricultural Economics Research Unit. The aim has been to provide realistic quantitative sectoral targets or guidelines to centralised policy making bodies to assist in planning future economic growth in New Zealand. This type of exercise has often been referred to as indicative planning. Until now, the work has entailed the use of an input-output projection model which has come to be known as the Lincoln Model. Briefly, the procedure is to calculate for some future year an economic structure which satisfies the inter-industry relationships and which achieves an exogenously specified increase in the base year consumption level. Economic structure in this context means: the level of output of each sector of the model, the level of exports from each sector, the level of investment by each sector, the level of importing of current and capital goods by each sector. Whenever the Lincoln model has been discussed there has usually been some mention of the optimum economic structure. It has been said that the structure is optimum when resources are so allocated between sectors that the highest level of net national product per head is achieved, consistent with the maintenance of overseas balance of payments equilibrium, full employment and a reasonable growth in incomes per head. While many would question this definition, it is probably a reasonable basis on which to begin investigations into the best future shape of the economy and it is certainly where scrutiny of the projected structure should begin. It has also been suggested that the most efficient method of investigating the nature of an optimum structure is by the use of mathematical programming methods. The purpose of this paper is to demonstrate how the linear programming technique might be used to calculate the optimum economic structure, although it has been found necessary to modify the definition quoted above. Instead of accepting an exogenous target for consumption, programming is used to calculate the maximum level of consumption consistent with the inter-industry relationships and resource availabilities. The need to formulate linear functions has prevented optimisation of consumption per head which would be more acceptable theoretically.