The Economic Benefits of Standards to New Zealand

The Standards Council of New Zealand, and several industry stakeholders, co-sponsored Business and Economic Research Ltd (BERL) to undertake a project to measure the economic effects of Standards on the New Zealand economy, in particular in the building and construction sector.
The project involved several stages:
Key findings
The literature concluded that Standards prevent market failure by preventing information asymmetry, and allowing and encouraging innovation. Standards also improve efficiency of markets by creating economies of scale, allowing network externalities, and reducing transaction costs.
The econometric estimation established a positive and statistically significant link between Standards and labour and capital productivity. The case studies provided qualitative data in support of the benefits of Standards including reducing transaction costs, preventing market failure, mitigating risk, and, again, creating economies of scale which improves productivity. The BERL research also highlighted that macro economic gains are a function of both more efficient production (labour productivity) and better decision making (capital productivity) within the New Zealand economy.
Data from the econometric analysis and the case studies were fed into the third stage of the project, the economic modelling. This indicated that Standards are a powerful economic lever and, over time, could lead to a 1.0 percent – or $2.4 billion – increase in New Zealand's annual economy-wide GDP.



Additional information:

AuthorsDr. Amapola Generosa, Dr. Ganesh Nana, Fiona Stokes, Hugh Dixon
Other bibliographical information:Standards New Zealand