Another graph from the Minister for National Development to show that house prices have not outstripped income growth. Another careful selection of base year. This time it is 1995. The graph is presented despite the absence of 1996 income data, resulting in an incomplete and rather odd looking chart. [ Cannot find another appropriate base year is it? ]
Sigh. I could of course as someone suggested show the charts of all the different base years, most of which would show the Resale Price Index (RPI) increasing more than the median household income(MHI) , but I fear that would make me appear rather juvenile. Many netizens already know the truth. As others have already pointed out, using all the others years from 2000 to 2008 as base years would show RPI increasing faster than MHI. This can be easily proven if challenged.
And, judging from the fact that the chart presented by M for ND is a since-1995-but-minus-data-for-1996-due-to-lack-of-info chart, I will hazard a guess that using 1998 and 1997 as base years would similarly show RPI outstripping MHI. Reasonable guess you think?
And for those who clamour for longer years of data, Lucky Tan has a chart going back to 1990.
But enough of charts. My intention when I blogged about the misleading chart was to show that there are many ways of interpreting and presenting statistics. Charts for 2000, 2001 and 2006 were chosen as examples to illustrate that point, not to advocate them as suitable base years. We need to look at data more holistically. Statistics should be used to understand, not to justify.
In fact, there are more problems with the comparison of RPI vs MHI apart from the base year:
1) Other netizens have pointed out that the RPI does not take into account the differences in sizes of the same flat type over the years. As flats get smaller over the years, the price in terms of per-square-foot (psf) basis increases by more than that indicated by the RPI.
2) According to the Department of Statistics:
“Household income from work refers to the sum of income received by all working members of the household from employment and business but excludes the income of domestic helpers. For statistical purpose, a household refers to a group of persons living in the same dwelling unit and sharing common living arrangements. A household may comprise related or unrelated members. Resident households are households headed by Singapore citizens or Permanent Residents. This category includes employed households and households with no working person.”
This would mean that household income would increase without any increase in individual wage levels under the following circumstances:
a) More households with both husband and wife working
b) More working children staying with parents for longer periods due to later marriages or no homes of their own
c) Later retirement
d) Relatives without homes of their own moving in
e) Renting out of rooms to other working adults. The incomes of the tenants are included in the household income as well according to the above definition.
All of these make it difficult to understand the people’s pain if we merely look at RPI vs MHI. In fact, this creates a vicious cycle whereby if prices increase, making homes more unaffordable, we will have more people crammed in each household therefore pushing up the household income, which then seemingly justify the higher prices!
Hopefully DOS will start to release / collect data on median income for individuals and use that for comparison instead. DOS currently publishes data on average income of individuals, but average values can be skewed by extremes and hence would not be ideal.
I am happy to read that HDB will be looking at shortening the waiting time for new flats by moving away from the BTO scheme. Much of the frustrations of home buyers arose from the fact that waiting time for new flats is too long and prices of resale flats are too high, making them feel sandwiched between a rock and a hard place. The long waiting time also channels demand towards resale flats, applying upward pressure on prices. If this can be done, it will make the lives of many young couples easier.
Wednesday, April 28, 2010
Friday, April 23, 2010
2nd Walkabout in Bishan-Toa Payoh
Last Sunday morning 18 Apr we held another joint walkabout with SDA at Bishan. The experience this time round was significantly different from previous walkabouts. The residents here were a lot more forthcoming and in fact eager to enter into discussions and debates.
One resident in particular left a deep impression. I asked him if he would vote for the opposition. He replied in Mandarin and I shall try my best to translate: The PAP managed the economy very well, but over-emphasized material achievements, fostering a tensed and highly competitive environment, which is detrimental to the building of a caring society. Although this is a problem for the society as a whole, it would be better if the government could provide some support. If the opposition can handle the economy well and at the same time help foster a more caring and compassionate society, I will vote for the opposition.
This is one of the best answers I have heard. I am sure he spoke for many. While we develop our economy, we need also to pay attention to our emotional and moral developments. They need to complement each other for a more stable and sustainable progress. The strong helping the weak is not only for the benefit of the weak, but is beneficial to the strong as well.
Before I met this resident, I had encountered another woman who asked me point blank:”So what benefit can you give me? If there is benefit then I vote for you lah!” While my rational mind tells me there is nothing wrong with this question, and in fact only to be expected, it was spoken with such self-assuredness, such absolute certainly that it is perfectly legitimate to bargain thus with her vote, that I was saddened. Thank goodness for this other resident who brightened up my day again.
四月十八日，我们与新加坡民主联盟一起到碧山拜访选民。
这一次的经历与之前有显著不同。这儿的居民比较积极地与我们交流讨论。
有一位居民的谈话尤其让我影像深刻。我问他会不会投反对党一票， 他说：“人民行动党在经济上做得很好，但太强调物质上的得失，使得人民精神紧张，相互之间竞争很强烈， 没有友爱精神。虽然说友爱精神是社会的问题，但如果政府能加以支持会更好。如果反对党可以同样把经济掌控好，又能鼓励人们有爱心，互相帮助，那我就会投反对党一票。”
这是我所听过最好的答案。相信他说中了许多人的心声。在经济发展的同时，我们也应同样注意精神上的发展，两者相辅相成，才能更稳健。帮助弱小，不单是为了弱小，同时也会让强者得益。
在遇到这位仁兄之前，有一位太太问我：“你能给我什么好处？有好处我就投给你。”虽然她说的没什么不对，但如此理直气壮的交易，还是让我有些小难过。亏得这位仁兄一番言语让我恢复了精神。
One resident in particular left a deep impression. I asked him if he would vote for the opposition. He replied in Mandarin and I shall try my best to translate: The PAP managed the economy very well, but over-emphasized material achievements, fostering a tensed and highly competitive environment, which is detrimental to the building of a caring society. Although this is a problem for the society as a whole, it would be better if the government could provide some support. If the opposition can handle the economy well and at the same time help foster a more caring and compassionate society, I will vote for the opposition.
This is one of the best answers I have heard. I am sure he spoke for many. While we develop our economy, we need also to pay attention to our emotional and moral developments. They need to complement each other for a more stable and sustainable progress. The strong helping the weak is not only for the benefit of the weak, but is beneficial to the strong as well.
Before I met this resident, I had encountered another woman who asked me point blank:”So what benefit can you give me? If there is benefit then I vote for you lah!” While my rational mind tells me there is nothing wrong with this question, and in fact only to be expected, it was spoken with such self-assuredness, such absolute certainly that it is perfectly legitimate to bargain thus with her vote, that I was saddened. Thank goodness for this other resident who brightened up my day again.
四月十八日，我们与新加坡民主联盟一起到碧山拜访选民。
这一次的经历与之前有显著不同。这儿的居民比较积极地与我们交流讨论。
有一位居民的谈话尤其让我影像深刻。我问他会不会投反对党一票， 他说：“人民行动党在经济上做得很好，但太强调物质上的得失，使得人民精神紧张，相互之间竞争很强烈， 没有友爱精神。虽然说友爱精神是社会的问题，但如果政府能加以支持会更好。如果反对党可以同样把经济掌控好，又能鼓励人们有爱心，互相帮助，那我就会投反对党一票。”
这是我所听过最好的答案。相信他说中了许多人的心声。在经济发展的同时，我们也应同样注意精神上的发展，两者相辅相成，才能更稳健。帮助弱小，不单是为了弱小，同时也会让强者得益。
在遇到这位仁兄之前，有一位太太问我：“你能给我什么好处？有好处我就投给你。”虽然她说的没什么不对，但如此理直气壮的交易，还是让我有些小难过。亏得这位仁兄一番言语让我恢复了精神。
Thursday, April 22, 2010
Public Transport Fare Changes
The PTC had just announced an overall reduction of 2.5% in public transport fares, in accordance to the fare formula. The adjustment to public transport fares is implemented together with a change in fare structure to that of “Distance Fare” structure. Under the new fare structure, “Commuters travelling the same distance will pay the same fare for the same type of service, whether they travel direct or make transfers.” (PTC Press Release http://www.ptc.gov.sg/QoSnFares/doc/Fare_revision_2010_news_release.pdf , para 6)
Saliant features of the new bus fare structure compared to the current:
1) Adult fares - increased rates for both minimum and maximum fares, but transfer penalty removed. So those taking direct buses pay more, but those who transfer pay less than before.
2) Senior Citizen and children - those who travel short distances or transfer pay less, those who travel long distances pay more
Recall the announcement made by Second Minister for Transport Lim Hwee Hua on 28 Mar 10 on the “review” of long distance bus services and the pieces start to fall into place.
According to the fare formula*, the fares must be reduced by a minimum* of 2.5%.
So if I have to reduce fares by 2.5%, and I want to cut down on long distance bus services, how can I implement these two measures in the best possible way?
Let us assume for illustration’s sake that one third of the public transport users use the long distance bus services (Group A), while the other two-thirds (Group B) travel short distances or make transfers.
Option 1:
Stage 1:
Reduce all fares by 2.5% across the board. All are happy.
Stage 2:
Remove long distance bus services and the people in Group A cry foul over the increase in bus fares and inconvenience due to transfers. Public sympathy is probably on the side of the affected users.
Option 2:
Stage 1:
Introduce a new fare structure such that
(i) fares are the same regardless of whether users travel direct or make transfers
(ii) the fares for Group A increases, but that for Group B decreases in such a way that overall loss in revenue is still 2.5%.
Being reasonable people who recognize that sometimes policy changes benefit others at their own expense, and since two-thirds of the public transport users benefit, Group A is silent / muted over their own increased costs. Group B is happy.
Stage 2:
Remove long distance bus services. Group A may be unhappy over the inconvenience, but can’t cry foul over increased cost because there is none at this stage. The cost increase had already been done in stage 1.
Well, excellent manoeuvering. Despite knowing what is coming, there is no way out. My sympathies to group A.
But then again, perhaps I am being paranoid. Perhaps the removal of long distance bus services will not happen and this change in fare structure has nothing to do with that.
For, according to the Press Release, Mr Gerard Ee, Chairman of the PTC, said, “With the new fare structure, commuters will have more choices and greater flexibility to decide on the best route to reach their destination and can choose to make transfers without being penalised. For example, instead of waiting for a direct bus, a commuter can hop on to the first bus that comes along and make other bus/rail transfers along the route, thereby shortening their total journey time.”
So you see, we are going to have “choices” of direct buses or transfers.
=================================================
Footnote:
* Maximum fare adjustment = Price Index – 1.5%
Price Index = 0.5CPI + 0.5WI; 1.5%: productivity extraction set for 2008 to 2012.
CPI: the change in Consumer Price Index over preceding year
CPI = 0.6% in 2009.
Wage Index (WI): the change in Average Monthly Earnings (Annual National Average) over the preceding year, adjusted to account for any change in the employer’s CPF contribution rate
WI = -2.6% in 2009.
According to this formula, maximum fare adjustment = -2.5%, i.e. fare adjustment
should be -2.5% or below. Hence, 2.5% reduction is the minimum reduction required, not maximum reduction allowed as a statement on the PTC website (http://www.ptc.gov.sg/QoSnFares/fr_overview.html) seem to imply. Somebody should correct that misleading statement. Unless the PTC mistakenly believed 2.5% to be the maximum reduction allowed by the formula, in which case it is quite worrying.
Saliant features of the new bus fare structure compared to the current:
1) Adult fares - increased rates for both minimum and maximum fares, but transfer penalty removed. So those taking direct buses pay more, but those who transfer pay less than before.
2) Senior Citizen and children - those who travel short distances or transfer pay less, those who travel long distances pay more
Recall the announcement made by Second Minister for Transport Lim Hwee Hua on 28 Mar 10 on the “review” of long distance bus services and the pieces start to fall into place.
According to the fare formula*, the fares must be reduced by a minimum* of 2.5%.
So if I have to reduce fares by 2.5%, and I want to cut down on long distance bus services, how can I implement these two measures in the best possible way?
Let us assume for illustration’s sake that one third of the public transport users use the long distance bus services (Group A), while the other two-thirds (Group B) travel short distances or make transfers.
Option 1:
Stage 1:
Reduce all fares by 2.5% across the board. All are happy.
Stage 2:
Remove long distance bus services and the people in Group A cry foul over the increase in bus fares and inconvenience due to transfers. Public sympathy is probably on the side of the affected users.
Option 2:
Stage 1:
Introduce a new fare structure such that
(i) fares are the same regardless of whether users travel direct or make transfers
(ii) the fares for Group A increases, but that for Group B decreases in such a way that overall loss in revenue is still 2.5%.
Being reasonable people who recognize that sometimes policy changes benefit others at their own expense, and since two-thirds of the public transport users benefit, Group A is silent / muted over their own increased costs. Group B is happy.
Stage 2:
Remove long distance bus services. Group A may be unhappy over the inconvenience, but can’t cry foul over increased cost because there is none at this stage. The cost increase had already been done in stage 1.
Well, excellent manoeuvering. Despite knowing what is coming, there is no way out. My sympathies to group A.
But then again, perhaps I am being paranoid. Perhaps the removal of long distance bus services will not happen and this change in fare structure has nothing to do with that.
For, according to the Press Release, Mr Gerard Ee, Chairman of the PTC, said, “With the new fare structure, commuters will have more choices and greater flexibility to decide on the best route to reach their destination and can choose to make transfers without being penalised. For example, instead of waiting for a direct bus, a commuter can hop on to the first bus that comes along and make other bus/rail transfers along the route, thereby shortening their total journey time.”
So you see, we are going to have “choices” of direct buses or transfers.
=================================================
Footnote:
* Maximum fare adjustment = Price Index – 1.5%
Price Index = 0.5CPI + 0.5WI; 1.5%: productivity extraction set for 2008 to 2012.
CPI: the change in Consumer Price Index over preceding year
CPI = 0.6% in 2009.
Wage Index (WI): the change in Average Monthly Earnings (Annual National Average) over the preceding year, adjusted to account for any change in the employer’s CPF contribution rate
WI = -2.6% in 2009.
According to this formula, maximum fare adjustment = -2.5%, i.e. fare adjustment
should be -2.5% or below. Hence, 2.5% reduction is the minimum reduction required, not maximum reduction allowed as a statement on the PTC website (http://www.ptc.gov.sg/QoSnFares/fr_overview.html) seem to imply. Somebody should correct that misleading statement. Unless the PTC mistakenly believed 2.5% to be the maximum reduction allowed by the formula, in which case it is quite worrying.
Wednesday, April 7, 2010
Housing Prices Vs Household Income – Alternative ways of viewing the statistics
With reference to today’s Straits Times article where Mr Mah Bow Tan said it is not true that HDB resale prices have outstripped income growth. He supported his statement with the following statistics:
This is the data behind the graph:
Choosing a suitable base year to support your conclusions is quite a useful trick that we should all learn.
This is the data behind the graph:
I would like to point out that the choice of the base year can be very significant.
Let’s see what happens when we change the base year to 2000 and 2001:
And if we look at it since the last General Election:
Resale prices up by 45.6%, while median household income is up 21.3%.
Choosing a suitable base year to support your conclusions is quite a useful trick that we should all learn.
Monday, April 5, 2010
Why should we vote for the opposition?
The power situation between the ruling party and the voters is a balancing act. If a ruling party secures an overwhelming majority, the balance of power tilts towards the ruling party. If the ruling party has only a slight majority in Parliament, and there is a viable opposition sitting in the wings, then the voters become more powerful.
If you are feeling helpless over some things you wish you could change, if you want greater power over your own life in your own country, vote for yourself.
I want greater power for voters than we have currently. There are two things we need to do to bring that about: 1) reduce PAP’s majority in Parliament and 2) build up a larger and stronger opposition. Although interdependent, the first needs to be done by the voters, the second by the opposition. You do your part, and we will do ours. [If you want to come over and help us do the latter, you know we will roll out the red carpet.]
If you are feeling helpless over some things you wish you could change, if you want greater power over your own life in your own country, vote for yourself.
I want greater power for voters than we have currently. There are two things we need to do to bring that about: 1) reduce PAP’s majority in Parliament and 2) build up a larger and stronger opposition. Although interdependent, the first needs to be done by the voters, the second by the opposition. You do your part, and we will do ours. [If you want to come over and help us do the latter, you know we will roll out the red carpet.]
Joint RP-SDA Walkabout in Bishan
Yesterday we had a walkabout session together with SDA.
This is the first time I met Mr Chiam and his long time supporters in person. During the walkabout, it was evident there was a lot for respect and support for Mr Chiam on the ground.
I also had the opportunity to chat with some of the SPP members, people who have supported Mr Chiam for 20 to 30 over years. These uncles are warm-hearted, helpful and ever hopeful. Although we are not in the same party, they extended a warm welcome to us newbies, and eagerly shared experiences. Their passion and steadfastness is totally awesome. I have only joined the opposition for a few months and already I am feeling the strain and demand on my time, managing a business, being the mother of 2 boys, and party activities. Yet these people have walked this path for more than 20 years! What kind of mental strength, conviction and compassion must there be for such perseverance?
I am very glad we held this joint walkabout. There is much I can learn from them.
This is the first time I met Mr Chiam and his long time supporters in person. During the walkabout, it was evident there was a lot for respect and support for Mr Chiam on the ground.
I also had the opportunity to chat with some of the SPP members, people who have supported Mr Chiam for 20 to 30 over years. These uncles are warm-hearted, helpful and ever hopeful. Although we are not in the same party, they extended a warm welcome to us newbies, and eagerly shared experiences. Their passion and steadfastness is totally awesome. I have only joined the opposition for a few months and already I am feeling the strain and demand on my time, managing a business, being the mother of 2 boys, and party activities. Yet these people have walked this path for more than 20 years! What kind of mental strength, conviction and compassion must there be for such perseverance?
I am very glad we held this joint walkabout. There is much I can learn from them.
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