Tag: victoria

The puzzle of where men outnumber women, and vice-versa.

The concentration of men and women in various parts of Victoria is stronger than you’d expect according to random variation.

There’s some real trends in place that seem like a genuine puzzle. (These charts are made from fascinating data released by the ABS this week.)

Screen Shot 2015-08-20 at 11.51.11 am Fully a third of postcodes have a gender ratio that’s skewed more than 5 per cent one way or the other. There are slightly more postcodes where women outnumber men by 5 per cent (79) than those where men outnumber women by 5 per cent (62.)

That’s to be expected because there are 99 men per 100 women in Australia.

But where men outnumber women they do so by a lot more.

The top result is Port Melbourne Industrial, which is a place I’m surprised anyone calls home. And indeed there are just 9 males to 4 females (ratio 2.25). Security guards who sleep among the containers? Who knows.

The next one is Braeside. A similar story with a ratio of 12 men to 6 women.  Then Alps East with 18 and 9. I’d like to imagine those 18 men have swags and wake each day to see their horse breathing steam under an old ghost gum.

Anyway, we can discount those three because the samples are tiny.

Screen Shot 2015-08-20 at 11.50.54 am
Female dominated suburbs include Chelsea and Rosebud. More men live in Seymour. Is this another case of nominative determinism?

Rosedale is the real thing. 2645 men to 1863 women (ratio 1.42). A little hamlet out in the Latrobe Valley, it is probably full of people working in the coal-fired electricity industry. A hard place for a fella to get a date, no doubt. Although the photos on the Rosedale Tavern’s facebook page suggest that’s where the local ladies go. (and it’s not as bad as East Pilbara where men outnumber women 350 per 100.)

It’s easy to explain some locations of high concentrations of men by reference to workforce pressures. They are found around heavy industries and agriculture.

Some are more tricky. Why is Footscray so full of testosterone? Why Docklands?

And why do women crowd into the expensive eastern suburbs? We see Burwood, Camberwell and Armadale in the top 10 with less than 90 men per 100 women.

Toorak, the suburb most emblematic of wealth, has a ratio of 91 men to every 100 women. Are there many young single women there perhaps? Or families whose daughters live with them for a long time?

The CBD , meanwhile, has a ratio of 107 men to every 100 women.

Perhaps we are seeing women self-select into suburbs they deem are very safe, while men are more willing to live in supposedly rough areas?

Do you have another explanation? Please feel free to share it in a comment below!

EDIT

Commenter Matt points out that women live longer, which is a very good point (that I wish I thought of). This is definitely part of the explanation as we can see in the graph for the most skewed suburb, Burwood:

Screen Shot 2015-08-20 at 1.21.51 pmBut it’s not the whole explanation. If it were, Footscray would look similar up til the mid-40s, when men start dropping off. Instead Footscray has more men at every age.

Screen Shot 2015-08-20 at 1.33.30 pmI think the puzzle has had a lot of pieces added, but there’s still some blank spots… Any further ideas?

Is $340 million a good price for cancelling a road?

The Victorian government today cancelled the contract for a road, and agreed to pay the winning bidder $340 million for their trouble. Is that a good deal?

Prima facie, $340 million seems a lot.

Despite that the reaction to the deal has been positive, with people describing the deal as a good one.

I remember writing a piece back in September, joking that the compensation could be as much as $500 million!

“I can imagine Lend Lease and the infrastructure minister sitting in a room right now, amending the cancellation provisions. $100 million? Why not $500 million? … We rely on their good citizenship not to do so. A flimsy protection indeed.

At that stage a payout of several hundred million dollars seemed ludicrous. The reason it now doesn’t is due to a psychological effect called framing.

Framing is why restaurants put a $50 steak on their menu, why apartment developers put a $2 million penthouse atop their building, and why TV marketing channels say their $9.99 item is a $20 item at 50 per cent off.

In each case, the context of a higher price makes the smaller sum you are about to pay more palatable. Some excellent work on framing has been done by Nobel winning economist Daniel Kahneman.

The former state government, by including in the contract a kill clause providing for a payout of over $1 billion, made the eventual payout look small.

$340 million could pay for a lot of trams
$340 million could pay for a lot of trams

If we try to analyse the $340 million payout without $1 billion ringing in our ears, how does it seem?

The Sydney metro cost the NSW government $130 million to cancel. But that’s a different kettle of fish. They got further down the track, including buying up property.

Melbourne’s contracts existed for only a month before the government changed and the future of the project was put at risk. If the consortium spent a third of a billion dollars in that month I am impressed at their efficiency.  If they spent it after the election, I am shocked at their boldness.

As for bid costs? One failed bidder, Leighton was reimbursed $12 million. In the Sydney Metro, one bidder spent $22 million and described that as “really big.”

So the $340 million dollars is probably not all costs. More likely, most is compensation – probably dressed up as costs plus a “fair markup”.

The reason it is not called compensation is that suits both sides. Labor leader Daniel Andrews looks like a master negotiator, and the companies – at risk of seeming to be blackmailing the state – look reasonable.

bike freeway
The Eastern Freeway running smoothly.

We should be angry at paying so much. The payout goes straight to the consortium’s bottom line. The longer the project ran, the higher the chance that the consortium made a loss. Cutting out early guarantees that won’t happen. Despite the high volume whining, this outcome has its upsides for the consortium – it banks a profit and puts its engineers onto another project.

Is this good bargaining by the state Government? I don’t know. The consortium seemed to have a great legal position. But the state government actually holds a pretty big stick. They could whisper that companies involved in demanding compensation will never win a bid in this state again unless they pull their heads in. Hopefully they bargained hard, but we shall never know.

Emphasising that these public monies have been wasted – ultimately our money that we paid in GST – is not an exercise in blaming the current government.

Their efforts – however imperfect – are absolutely glowing examples of good policy compared to the previous administration’s deliberate sabotaging of the state of Victoria. Including the kill clause is a stain on their legacy that should be remembered for a long time, and they must bear the blame for the size of today’s compensation package.

Victoria is cold on the Liberal Party – what can they can do about that?

The state government of Victoria lost power this weekend. The election saw their narrow majority reversed, and by losing government after just one term in office, they set a record. No other government has done that since 1955.

Since Jeff Kennett’s reign as premier from 1992 to 1999, the Coalition’s appeal to the electorate has been slight. They’ve lost elections in 1999, 2002, 2006 and 2014, some by big margins. They won in 2010 by just two seats.

The state is lurching away from the Coalition. (The Coalition is an alliance between the large city-based Liberal Party and the smaller, country-based National Party).

coalition blue

The Liberals can console themselves with a decent-looking result in first-preference terms (766,000 votes to Labor’s 820,000 on the count so far). But there are plenty of voters that do not put Labor first whose vote ends up with them thanks to the magic of preferential voting.

greens first preferences

The Liberal party do not have an equivalent. The Nationals operate mainly in different areas to the Liberals and are in any case a smaller, less popular party. The Greens took 11.2 per cent of the vote in 2014, to the National Party’s 5.6 per cent.

The whole state is lurching away from the Coalition. It’s not just the Greens. The National party are losing seats to Independents all over the bush.

Faced with this remarkable recent record of underperformance, The Liberal party can either follow the population or fade into irrelevance. They need to tack to the centre to become believable on key issues for voters at state elections, like schools, transport and hospitals.

The choice of a new leader will be essential in remaking the party. In some ways, the selections on offer look good: An man in his 30s of Ukrainian descent or a prize-winning lawyer known for his pro bono work . But Matthew Guy is a former staffer to Jeff Kennett and an unpopular planning minister while Michael O’Brien is a former adviser to Peter Costello.

These two are the front-runners for Liberal leadership. If you keep building a new house out of the same bricks, there’s a limit to how much better you can make it. And when you can narrow down your field to two senior cabinet ministers so soon after a crushing defeat, it indicates a “steady as she goes” attitude. Perhaps the Liberal party is unable to reform itself, and the voters will have to do it for them.

“Tearing up the contracts” for the road tunnel means there is an actual difference between the political parties. Wow!

The state opposition here in Victoria has just announced it will cancel the contracts for an $8 billion tunnel if it wins the election in November. (While it’s true there’s often a big traffic jam on the road in question, the tunnel fails both cost-benefit analysis and any assessment of what sort of infrastructure the city will need in the future).

THE POLITICS

Deciding to cancel the contract is a bold call, and I suspect, the result of intensive polling. Of course, the government saw this coming, and has a strong line of attack running, calling opposition leader Daniel Andrews an economic “vandal.”

In pledging to cancel the contract, Andrews leaves open the question of what he might do instead, and he doesn’t seem to have much of an answer.

Of course Labor doesn’t want to make new giant policy pledges, before the election. The end of the road project would mean, however, that some money becomes free.

 

Labor still has as part of its election platform the construction of a major rail tunnel – “Melbourne Metro”. Both parties are pretending these two mega-projects are not alternatives, with the coalition government pretending to progress the rail project alongside its favourite road. But realistically, the expense and trouble means the projects are an either/or. Cancelling the road contract is an essential input to building the rail project, it’s just that Labor can’t really admit it.

Assuming the “vandal, Naysayer” tags don’t stick, and the lack of a clearly defined alternative doesn’t hurt Andrews much, I think this is smart politics. Voters like a clear choice and the sniff of real leadership.

The seats that would benefit from the tunnel are mainly Liberal strongholds, and I think if Labor focuses on talking about health and education for the rest of the campaign (and especially if Tony Abbott pops his head up) Labor will win the election.

THE ECONOMICS

Promising to tear up the contracts, before they’ve been signed, is a big risk on the part of Labor. I can imagine Lend Lease and the infrastructure minister sitting in a room right now, amending the cancellation provisions. $100 million? Why not $500 million? Protecting the project and/or hamstringing Labor could both be achieved in the stroke of a pen.

We rely on their good citizenship not to do so. A flimsy protection indeed.

Of course there should be some cancellation provision. A lot of money has already been spent on this project. But from an economy-wide perspective those are sunk costs and we ought to ignore them.

The companies that are selected to build the tunnels will seek sympathy. They will talk a lot about all the investments they have made – hiring people, doing mapping, buying diggers, etc. But we should not listen too closely:

  1. Until just this week there were two bidders in the running for the project. Each of them faced a chance of missing out even if the project went ahead.
  2. The prospect of the project being cancelled was obvious. I bet they haven’t actually made a dedicated unilateral investment in this project for months. Anything they have bought will probably be able to be sold or moved to other projects.
  3. Generous contract cancellation provisions arguably makes this money for jam. When you start building a project, there’s risk of making a loss. When it gets cancelled before you begin, any compensation is pure profit.

The real impact of this cancellation will be felt in future projects. Political parties will have similar incentives to infrastructure companies. Both have incentives to prevent the opposition cancelling the contracts.

If Lend Lease offers Labor a contract for the rail tunnel that includes a slightly lower total cost but enormous contract cancellation provisions, Labor will leap at the chance to protect their project from the whims of future administrations.

There’s game theory at work, and this might be the last chance we have to cost-effectively vote out a project of this kind.