Choosing a contemporary economic issue
The test your issue must pass
- The standard defines a contemporary economic issue as "a current issue of special interest to a local community or New Zealand society as a whole, which involves the allocation of scarce resources".
- Break that into four tests, and your issue must pass all of them.
1 — Is it current?
- "Contemporary" means happening now, with data available now. A historical issue does not qualify.
2 — Is it of special interest to a local community or to New Zealand?
- It must matter to identifiable people. A global issue with no New Zealand dimension is a poor choice, because the standard requires impacts on various groups in New Zealand society.
3 — Does it involve the allocation of scarce resources?
- This is the decisive test. Something is an economic issue when there is not enough of something to satisfy everyone who wants it, and a decision must be made about who gets it.
- Scarce resources include land, labour, capital, water, minerals, energy, road space, time and money.
4 — Can you model it?
- The Achieved criterion requires causes explained using economic models. If you cannot draw a curve for your issue, you cannot meet the criterion.
Issue types that work well
| Issue type | The scarce resource | The likely model |
|---|---|---|
| Housing affordability | Land and dwellings in a location | Market S & D for housing |
| Water allocation | Fresh water in a catchment | Market S & D, or a quantity limit |
| Road congestion | Road space at peak times | Market S & D for road space |
| Electricity prices | Generation capacity | Market S & D for electricity |
| A shortage of skilled workers | Skilled labour | Labour market S & D |
| A local levy or charge | Whatever it is charged on | Market S & D with a tax |
| Waste and landfill capacity | Landfill space | Market S & D, plus external costs |
| Access to a fishery | Fish stock | Market S & D with a quota |
Issue types that cause trouble
- Too broad. "Climate change" or "inequality" are enormous. You cannot define the market, so you cannot model it. Narrow it to a specific New Zealand market: the price of emissions units, or housing costs for low-income renters.
- No New Zealand dimension. Impacts must be on groups in New Zealand society.
- Not about scarcity. A topic that is interesting but does not involve competing uses of a limited resource is not an economic issue.
- No data. You will need evidence that the issue exists. Check the data is available before you commit.
Narrowing a broad topic — the technique
Ask three questions in order:
- What exactly is scarce? Not "housing" — rental dwellings within commuting distance of a particular city.
- Which market does it trade in? Who are the buyers and who are the sellers?
- What changed? An issue is always a change — something got scarcer, or demand for it rose. That change is what you will model as a curve shift.
Where to find evidence
- Stats NZ — population, housing, rents, employment, prices
- MBIE — regional economic activity, building consents, energy, tourism
- Local council — plans, consents, rates, infrastructure reports
- The Treasury / RBNZ — where the issue touches national policy
- Named, dated and referenced every time.
Worked ExampleNarrowing a topic until it works
A student wants to write about "the cost of living". Show how to narrow it into a workable AS91228 issue.
Step 1 — Test the original topic
Current? Yes.
Of special interest? Yes.
Allocation of scarce resources? Only vaguely — "the cost of living" is about the general price level, which is AS91222's territory, not a single resource-allocation problem.
Can you model it? Not as stated. There is no single market with buyers and sellers; it is an average across hundreds of markets.
Verdict: too broad. It would end up as a weaker version of the inflation standard.
Step 2 — Ask what exactly is scarce
Which part of the cost of living bites hardest, and what is genuinely limited in supply?
Rental housing in a growing city. Dwellings take years to build, and land near employment is fixed. That is a real, physical scarcity.
Step 3 — Identify the market
- The good: rental dwellings in that city.
- Buyers: households wanting to rent — renters.
- Sellers: landlords offering dwellings.
- The price: weekly rent.
- The quantity: the number of dwellings rented.
Now the market model can be drawn: rent on the vertical axis, quantity of rental dwellings on the horizontal.
Step 4 — Identify what changed
An issue is always a change.
Demand side: population growth from internal migration and immigration; more people forming single-person households; students and workers moving to the city.
Supply side: slow consenting; construction cost inflation; the time it takes to build; land use restrictions.
So: demand shifted right, and supply responded slowly. That is a modellable statement, and it will drive the entire causes section.
Step 5 — State the final issue
It is current, it is of special interest to a local community, it is unmistakably about the allocation of a scarce resource (dwellings and the land they sit on), and it can be modelled with market supply and demand.
Step 6 — Confirm the data exists
- Stats NZ — population, household formation, dwelling counts
- MBIE — the rental bond database, building consents
- Council — consenting and land supply