Thursday 7 February 2013


Dang, but I hate MS-Excel.  I've spent an hour trying to work out how to get years as a label on the X-axis.  It's not because I'm stupid: it's quite straight-forward using R or GD.  ANNyway, I thought I'd practice - I'm teaching this stuff after all - by displaying another interesting data-set chosen by one of my 1st Yr ICT students. It shows some quite weird collective behaviour.  In the mid-90s, the Irish Government decided that the old clunkers which were rattling around on the roads were a hazard to health and safety.  They implemented a scrappage scheme whereby, if you had a car more than 10 years old, you could send it off-road for recycling and claim £1000 off the cost of a new car. At the time it seemed an entirely appropriate way of using fiscal policy to drive desirable behaviour among voters. It also seemed a good deal to us and we traded in our 13 y.o. Vauxhall Astra for a new blue Skoda hatchback, which cost £8,000 and small change.  It's not clear from the data, however, that the scheme really had any effect on new car registrations which had started to climb from about 1993 and didn't lunge upwards in 1995/6.  The graph shows clearly the cliff as 2008 moved into 2009, the recession started to bite and new car sales fell to a third of what they'd been previously.  It seems to show an effect from the second €1,500 scrappage scheme started in Dec 2009: boosting car sales in 2010 by 50%.  Far from being another fine example of social manipulation to improve road safety and the burden on Emergency Rooms, this second scheme felt more like a boondoggle to preferentially support car-dealerships in contrast to other businesses, who could all have done with a bit of govt support at that time.  

Notice something odd about the data?  What is driving the anomalous peak in the year 2000?  Were we collectively so relieved to have survived Y2K that we all went on a spend-spree?  Were 00 registered cars madly more desirable than the years either side?  And here's a sobering fact.  Those 225,000 new cars cost their owners (assuming 20K a vehicle, which must be the right order of magnitude) €4.5billion at a time when the annual tax take was about €60billion. That's how to develop a growth economy - buy a really expensive piece of kit, then scrap it after ten years and buy another.

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