Monthly Archives: May 2012

Chris Cook

The cash advantage for converting to become an academy is bigger for schools in more affluent areas. Read more

The governor of the Bank of England has pointed out that Britain’s recorded economic growth in the second quarter of 2012 will be depressed by the plethora of bank holidays. Within three months there is a four-day weekend for Easter, a May day break and another four-day weekend to mark the Queen’s diamond jubilee.

Still, the news is not all bad: output will be boosted in the following quarter by expenditure associated with the London Olympics. The governor’s purpose – he can have had little hope of success – was to pre-empt speculation by financial commentators who perceive significance in 0.1 per cent fluctuations in reported output.

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Liverpool has emerged as the whiplash capital of Britain, where the government has recorded more than one compensation claim for neck injuries sustained in a traffic accident for every 50 residents.

A “heat map” drawn up by the Financial Times after a freedom of information request, shows a wide geographical disparity in alleged whiplash injuries, with 20 times more compensation claims per head in Liverpool, Uxbridge and Oldham than some other parts of the country.

Personal injury lawyers suggested regional variations in accident rates helped explain the figures – but insurers said they provided one of the clearest signs yet of fraudulent claims.

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Sally Gainsbury

There has been speculation recently that the government is planning to divert millions of pounds in NHS funds from deprived urban areas in the north, to leafy, Conservative voting constituencies in the south.

This stems from health secretary Andrew Lansley’s recent comment that “age is the principal determinant of health need” and that distribution of the £100bn budget for the NHS in England should “get progressively to a greater focus on what are the actual determinants of health need.”

Somewhere along the line, those comments were interpreted by a generally cheesed-off medical profession that Mr Lansley intends to introduce an “age-only” NHS allocation formula, switching substantial NHS funds from, generally younger, Labour-voting constituencies in north to the octogenarians who thrive in the Conservative-voting villages of the south.

It’s a good story, which might even contain elements of the truth, but the reality, as ever, is a little more complicated.

At present, five separate allocation formulae are used to divvy up different bits of the £100bn NHS pot to different areas of England. The largest share – the hospital care budget – is divided up using one formula, while four others – mental health, GP prescribing, health inequalities (more on that in a later post) and maternity – are each allocated using their own separate formula. (Think for a second about the demographics driving the demand for maternity services as opposed to, say, hip replacements, and you will grasp why this makes sense.)

Health economists and statisticians frequently tweak and argue over these formula in order to move, hopefully, ever closer to the Holy Grail: a distribution of health resources which is fairly distributed on the basis of health need. Read more

Chris Cook

Grammar schools are a seductive idea: skim off high performing children at the age of 11 for education together. At the moment, there are 164 such schools in England, in a few counties which did not manage to slough them off. But their success is a myth. Read more

Martin Stabe

With more than a year’s worth of of data from our exclusive business sentiment poll, the FT/Economist Global Business Barometer, now available, some interesting longitudinal patterns are becoming apparent for the first time.

Most notable among them is the steady erosion over the past year in executives’ perceptions of the “business friendliness” three of the world’s biggest developing economies, India, China and Brazil.

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by guest contributor Paul Hodges

Shale gas developments in the US have sparked a wave of euphoria about the opportunity for a renaissance of its domestic manufacturing base.  Petrochemicals should be one of the main beneficiaries, as the ethane produced from shale gas discoveries now provides the US with some of the cheapest feedstock in the world.

Major producers including Dow Chemicals, Shell and Chevron Phillips have already announced plans to build new ethane-based capacity.  Others are likely to join them.  Current estimates suggest total US ethylene capacity could therefore increase by 25 to 30 percent from today’s 27 million tonnes.

However, one key factor has the potential to spoil the story – much of this new capacity will need to be exported in the form of polyethylene (PE) and other major plastics.  Yet as the chart shows, based on data from Global Trade Information Services, US net PE exports have actually been declining since 2010, even though its cost advantage from shale gas was increasing. Read more

Chris Cook

If you were writing an economists’ manifesto, regional payscales would be one of the few items on which most agreed. The principle is pretty simple: why should a teacher be paid a king’s ransom in Southport, but starved in Southwark.

Part of the principle of this idea is that it is difficult to recruit in areas of high “outside” wages, if you have a national pay-scale. Conversely, the theory goes, when the state “overpays”, it can price out local enterprise.

Some economists from the Centre for Economic Performance at the LSE found a scary natural experiment to test this idea: survival rates from heart attacks.

We predict that areas with higher outside wages should suffer from problems of recruiting, retaining and motivating high quality workers and this should harm hospital performance. We construct hospital-level panel data on both quality – as measured by death rates (within hospital deaths within thirty days of emergency admission for acute myocardial infarction, AMI) – and productivity. We present evidence that stronger local labor markets significantly worsen hospital outcomes in terms of quality and productivity.

A 10 per cent increase in the outside wage is associated with a 4% to 8% increase in AMI death rates. We find that an important part of this effect operates through hospitals in high outside wage areas having to rely more on temporary “agency staff” as they are unable to increase (regulated) wages in order to attract permanent employees.

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Emily Cadman

The latest World Health Organisation statistics report has thrown a light on the unglamorous but essential backbone of health policy – accurate death reporting.

According to the report, currently only 15 percent of the world’s population lives in a country where more than 90 percent of births and deaths are registered – and unsurprisingly most of these 34 countries are in Europe and the Americas.

It’s not surprising that war torn countries like Afghanistan might have had other concerns than registration data. But the list of countries without comprehensive data include major economic and population centres like China and India – both of whom use sample registration approaches. The full country by country list is on this pdf.

WHO region No death registration
Low quality Medium quality High quality Number of WHO
Member States
AFR 42 2 1 1 46
AMR 2 7 13 13 35
SEAR 7 4 0 0 11
EUR 2 11 24 16 53
EMR 9 10 2 0 21
WPR 12 4 7 4 27
Global 74 38 47 34 193

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The rapid growth in greener, more fuel efficient vehicles will leave the Treasury with a £13bn shortfall in motoring taxes by the end of next decade, despite an anticipated 44 per cent jump in traffic.

The predictions from the Institute for Fiscal Studies, an independent think tank, are based on an analysis of the government’s own long-term forecasts, which show that by 2029 fuel duty will contribute 1.1 per cent of GDP, down from 1.7 per cent today. Vehicle excise duty will drop to 0.1 per cent from 0.3 per cent.

Receipts from the taxes total £38bn a year, equivalent to 7 per cent of all Treasury income.

The lost revenue is equivalent to increasing the basic rate of income tax from 20p to 23.4p, VAT from 20 per cent to 22.7 per cent or raising fuel duty by more than 50 per cent, according to the IFS report, published today.

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Chris Cook

The 282 schools outside London which pull off the feat of beating the national averages are the ones that policy makers should really keep an eye on. Read more

Chris Cook

What measures should we use for spotting schools that are effective at helping poor children? Not the one proposed by the Department for Education. Read more

Immigration has helped to raise average wages of most UK-born workers but held back wage growth for those at the most poorly paid end of the labour market, new study has shown.

Research published in the Review of Economic Studies examined the period between 1997 and 2005, when there was an increase in the foreign-born population equal to 3 per cent of the native population.

The authors – economists Christian Dustmann, Tommaso Frattini and Ian Preston – estimate that immigration depressed wages by 0.7p per hour at the 10th percentile, or the bottom layer, of UK-born workers.

But immigration contributed about 1.5p per hour to wage growth at the median and slightly more than 2p per hour at the 90th percentile.

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Schools taking part in the government’s flagship academies programme are being overpaid by more than £120m this academic year owing to errors by the Department for Education, an investigation by the Financial Times has revealed.

The majority of the overspend will be clawed back from local authorities, stoking concerns that schools participating in the converter academies scheme are being favoured over other state schools.

    Currently seen as the government’s most visible public policy success, if local authority schools opt to become an academy, they are funded directly by the DfE rather than via local authorities. They gain autonomy over pay and curriculum, but are supposed to receive equivalent funding.

    However, analysis of DfE data reveals that 90 per cent of England’s 1,421 converter academy schools are being overpaid, with the bulk of the errors coming from schools which converted in the previous academic year.

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    Martin Stabe

    What we’re reading today in the world of statistics, open data and data journalism:

    We like a good political choropleth around here, and Sunday’s European election extravaganza did not disappoint in the psephological cartography department.

    A good map of the Greek results can be found at, Le Monde has the obligatory map of the French presidential election par département, and Michael Neutze’s site Wahlatlas covered the results in the German state of Schleswig-HolsteinRead more

    The House of Lords authorities are refusing to hand over officials’ estimates of how much it will cost taxpayers to replace the chamber with a mostly elected senate, prompting anger from Tory politicians.

    Officials have rejected a freedom of information request by the Financial Times, saying that the relevant information was produced “solely” for the joint committee on Lords reform. “A decision was taken by them not to publish it as part of their report,” they said in their response.

    David Davis, MP for Haltemprice and Howden, said there was a “clear-cut case” for the cost estimates to be put in the public domain.

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    Emily Cadman

    What we’re reading today in the world of statistics, open data and data journalism:

    It’s results day in the  UK for local and mayoral elections, which means there are a number of interesting election related posts.  As the debate in the studios continue as to the effect the poor weather had on voter turnout, the Guardian’s Polly Curtis rounds up the evidence. Read more

    Facebook is going public, but what is it really worth? This interactive calculator is a basic two-step discounted cash flow model to help illustrate how variations in key assumptions can change the potential market value and share price of an IPO.

    Enter your projections for Facebook’s sales growth, ebitda margin, and capex-to-sales ratio to see how these key assumptions affect the potential market value of the social networking firm’s offering.

    Emily Cadman

    What we’re reading today in the world of statistics, open data and data journalism:

    Reference material
    The Data Journalism Handbook – the first edition of the book is now available for free online and features contributions from data journalists around the globe, including our colleague Cynthia O’Murchu who explains her investigations into European Structural Funds and care homesRead more

    Political attention in recent years has focused on the renminbi’s nominal exchange rate with the dollar, with pressure on China to let the renminbi appreciate.

    In fact, over time the renminbi has appreciated against the dollar, particularly when the real exchange rate – which accounts for domestic inflation relative to foreign inflation – is calculated. But the appreciation against other currencies has been much milder, especially the euro.

    This interactive graphic explores how China’s real and nominal exchange rates against its main trading partners have fluctuated over time using data constructed by Eswar Prasad, professor at Cornell University and a senior fellow at the Brookings Institution.

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