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Eric Crampton

Eric Crampton



Articles by Eric Crampton

Reader mailbag – competition for the sporting market edition

3 days ago

A learned reader writes in response to the post on competition among sporting leagues:

You are generally right about the lack of competition for the market in sport but I suggest you have a look at FINA, the world body and Olympic entity for most aquatic sports: swimming; diving; water polo; artistic swimming (formerly synchronised swimming); high diving; and open water swimming, along with masters for all these events. It faces competition for the sport in high diving, open water swimming, swimming and provision of competitions for masters (ie the geriatric). In swimming there are three competitors to FINA: international life saving that has a lot of swimming events, including many held in pools with international competitions; NCAA, about which you will know more than me; and now the

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The year of delivery

4 days ago

Stuff reports:

The Government will move to ban non-compostible fruit stickers today in response to a huge new report about single-use plastic, Stuff understands.It’s understood the Government will also move to ban plastic cotton buds and single-use plastic cutlery, items which both have biodegradable alternatives made out of bamboo.Compostible apple stickers do exist but are not in wide-use.The announcement will be made on Sunday morning as part of a response to report from the Prime Minister’s chief scientist, alongside a host of other measures.
Have seen a lot of support on twitter for this from people annoyed at having to peel stickers off of apples; I suspect shops will switch to the biodegradable ones unless there’s some other better and cheaper tech out there to let shop clerks

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One policy instrument for each target, and every agency in its place

4 days ago

My column in today’s Fairfax papers argues that central banks really don’t have any business playing in climate change policy. It isn’t that climate change isn’t important; it’s rather that central banks have one big job – two if they’re also responsible for prudential regulation. 

A snip:

In October, the Reserve Bank’s general manager for governance, strategy and corporate relations highlighted the bank’s growing focus on climate change. As part of the same press release, governor Adrian Orr noted the bank’s role in "greening the financial system" and managing environment and climate-related risks.Some of this makes sense as part of the Reserve Bank’s role in prudential regulation. If a bank’s capital stock includes a lot of farm mortgages that would be underwater with a change in

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Data preservation, IRD, and the OIA – the saga continues

10 days ago

About a month ago, I made an OIA request for IRD’s documentation around data sentencing for the Colmar Brunton poll data.As you’ll recall, IRD had initially refused my request for the Colmar Brunton poll data citing tax secrecy, but updated that in November. They said that they should have refused the request on grounds that the data requested did not exist, because they’d requested that Colmar Brunton delete the data before I’d requested it.I received a response yesterday.

I’ve replied noting that I have made a new request – I’d like the records around the sentencing decision. If IRD wishes to withhold that information on same tax secrecy grounds as it refused my prior request for the data, I think they’d need to say so.I’m interested in how IRD viewed its requirements under the Public

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Chicago and Academic Freedom

10 days ago

Vic Uni Associate Dean Michael Johnston, and colleagues, want New Zealand’s universities to adopt the Chicago Statement on academic freedom and free speech. 
I cover the case for it over at Newsroom today ($). A snippet:
The Foundation for Individual Rights in Academia chronicles violations of academic freedom and student speech rights in America, regularly tallying abuses like Northwestern University’s censorship of a department’s academic journal and its chilling investigations of other scholars; Texas State University’s threats to the funding of a student newspaper over content the administration did not like; and, DePaul University’s requiring a socialist student organisation not only to have security officers monitor their discussion with the author of a book on Karl Marx, but also

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Sport and competition for the market

16 days ago

Colby Cosh’s latest column would be great fodder for grad classes in Industrial Organisation.We can think about sporting competition in a few ways. The obvious one is competition within the market. Teams compete against each other to be the best within the league’s set of rules.There’s also a weak form of competition against other sports in the overall market for attention. Leagues adjust their rules to maximise profits across the set of teams; if the game isn’t fun to watch, people will watch something else. So if the competitive balance gets out of whack, the league might use salary caps or entry drafts to make the game more competitive.But there doesn’t seem to be much competition for the market within a sport. If you want to watch professional hockey in North America, there’s the NHL

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Open for business?

17 days ago

Bryce Wilkinson and I go through some of the proposed changes to New Zealand’s Overseas Investment Regime over at Stuff.

Well, went through. The piece came out last week, but I’d missed that they’d put it up.An opening snippet:
Sometimes, being at the front of the queue isn’t a good thing.If you lined countries up in a row, starting with the places least friendly to foreign investment, and ending with the places with the fewest restrictions, New Zealand would be near the front of the queue. In the OECD’s 2018 survey, only Jordan, China, Malaysia, Russia, Indonesia, Saudi Arabia and the Philippines were more restrictive – and most countries were far more liberal.So it is a bit odd to hear Trade Minister David Parker talking this week about the need to tighten up New Zealand’s foreign

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Afternoon roundup

17 days ago

This afternoon’s worthies:Vic Uni’s James Kierstead and Michael Johnston in defence of free speech. 
Liberalism and democracy, as Karl Popper recognised, rest on substantive values, values that have to be defended if liberal democracy is to survive and flourish. And it’s up to all of us to do the work of defending these values. If we say nothing while governments, corporations and ideologues threaten and quash the free expression of ideas, we are, at least tacitly, voting democracy out of existence.

What a beautiful validity check. Do better teachers really make students taller?
Business regulations and poverty
Using panel data for 189 economies from 2005 to 2013, this paper shows that business-friendly regulations are correlated with the poverty headcount at the country level. This

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Diversity in the Boardroom

18 days ago

I just loved Isabelle Solal and Kaisa Snellman’s piece over in Organisation Science. 

They look at the effect of the gender of a company board appointment on subsequent sharemarket performance (Tobin’s q). They summarise the existing literature, concluding (in line with the rest of the academic literature) that there is no particular effect of boardroom gender on company performance.But then they do something rather neat. They look at how things vary based on company rankings on the KLD corporate social performance index. That index ranks companies by their commitment to corporate social responsibility objectives, and includes an index ranking a company’s commitment to gender diversity.They find that the gender of a board appointee has no effect on sharemarket performance, among firms

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Really protecting tenants

24 days ago

The government is making it harder for landlords to evict tenants, among a few other changes to the Residential Tenancies Act. 

It’s a brilliant bit of politics. 

Suppose that successive governments have so screwed up the rules around getting new housing built and the incentives facing councils to consent new housing that we wound up with a housing shortage. 

Suppose further that your government got elected on a promise to fix the mess – but has achieved close to nothing on the file after two years with an election coming. Kiwibuild was never going to work, and wound up being a costly distraction from the real supply issues at play.

And suppose further that you really need anger about broken housing markets to be directed away from the government. 

What better play than

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Police and guns

24 days ago

If this is right, it looks like New Zealand needs better police rather than stricter firearms laws. 

Here’s Derek Cheng at the Herald:

The man accused of the March 15 terror attack was supplied 2300 rounds of ammunition by using a police mail order form that also revealed to police he had an AR-15, a parliamentary select committee has been told.The information was part of a submission from licensed firearms dealer Paul McNeill to the finance and expenditure committee, which is considering the Government’s second tranche of gun law reform.McNeill, who is also director of the Aoraki Ammunition Company, appeared before the committee on Friday via video link, but his submission was quickly taken offline in case it might affect the accused’s right to a fair trial.He told the committee he

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Confusing the Monster-Ometer with the Frog Exaggerator – again

28 days ago

The latest results from the NZ Health Survey are up.And so is Alcohol Healthwatch’s take on those stats. They take it all as reason for tightening control on alcohol.

Go and have a look at the stats for yourself. For each of a pile of indicators, MoH slices up the data by gender, by age, and by ethnicity. It then says whether the difference between the latest stat and last year’s stats, or 2014/15’s stats, or the 2011/12 stats for the series that go back that far, are statistically significant.

Now one immediate problem is that if you’ve sliced up the data two dozen ways and you’re running comparisons between three pairs of years for each of those slices, you’ve got a lot of potential comparisons. 24 comparisons per indicator times 3 year-pairs of comparisons, for the indicators

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Film subsidies are stupid, a continuing series

29 days ago

So. 

The New Zealand government, committed to wellbeing, believing that tax is love, wanting to ensure that every loving tax dollar spent provides the greatest possible increase in wellbeing, and fronting the Christchurch Call to stop harmful speech, has put $243,000 towards a Chinese propaganda film with the tagline "Anyone who offends China, no matter how remote, must be exterminated."Thomas Coughlin has the story over at Stuff:
The film was not made directly by the Chinese Government, but by a slew of Chinese state-owned enterprises, including the China Film Group Corporation, China’s largest film producer, and Bona Films.Bona Films is a subsidiary of China Poly Group, another state-owned enterprise. China Poly Group is an unusual conglomerate housing the world’s third largest art

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Semester Abroad Sanctuary

29 days ago

The Chinese University of Hong Kong does not look like a safe place for students.After the Canterbury earthquakes, a lot of universities, both here in NZ and elsewhere, made it really really easy for Canterbury students to do a semester as visiting students.I don’t know how many students at the Chinese University of Hong Kong would want a semester abroad in New Zealand. And it could be that the messes there will be over by the time university starts up again in New Zealand.But it could be good if New Zealand’s universities had a chat with each other, and with Immigration New Zealand, about what they could do in hosting students from Hong Kong needing a safe space come the next semester, should it remain unsafe in Hong Kong.Update: Why not consider semester-abroad students from Hong Kong

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Campaign finance balloons

November 13, 2019

I used to spend a bit of time on campaign finance when I taught public choice – the evidence on whether money buys politicians’ votes, extent to which campaign expenditure influences outcomes, different models of lobbying activity and the like. 

I liked there to note that campaign finance reform is a bit like squeezing on a balloon. Things will always pop back out in other places, and you have to watch for that.Guyon Espiner’s found one spot where the balloon has bulged out:
A mysterious foundation that loans money to New Zealand First is under scrutiny, with a university law professor saying although it’s lawful, it fails to provide the transparency voters need in a democracy.Records show New Zealand First has disclosed three loans from the New Zealand First Foundation. In 2017, it

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No pressure

November 11, 2019

I’d failed to keep up with South Park and have finally caught up with most of the excellent Season 19. 

After a Whole Foods opens up, Randy Marsh finds himself charity-shamed for not wanting to add $1 to his purchase to help increasingly dubious causes, then shamed for only adding a dollar.In my reader mailbag, I find the following. It was emailed to parents at one of the Wellington primary schools:
November 8, 2019Support Staff Make a Significant Difference For All Our ChildrenI know you will all agree that this talented team of staff make a significant positive difference to our school, including our library and teacher aide staff. Their collective agreement is currently being negotiated between NZEI and the Government. These staff are currently employed directly by the school but we

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Regulatory plumbing and insurance pricing

November 10, 2019

Insurance pricing winds up a mess when the government leans on insurers to not price insurance fairly. 

Minister Robertson last week admonished insurers not to use more granular pricing in ways that would leave some parts of the country uninsured or ‘uninsurable’.Currently, people who live in low risk places cross-subsidise people who live in high risk places. This happens explicitly through EQC, which does not risk-base its prices for coverage. But it also happens implicitly when the state either hints or (now) shouts that it’ll come down hard on the industry if prices are set to reflect risk.And it then all causes a mess.In the absence of the regulatory shadow, we’d expect one of two things to happen. Either insurers would start offering cheaper insurance deals based on granular data

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Illicit markets and Bali Booze

November 8, 2019

The Herald reprints an Australian story on a couple of tragic deaths in Bali from drinking cocktails that had methanol in them. 

The story argues that methanol is likely the result of home distillation.
But what the young tourists were experiencing was far from a hangover. They’d consumed a toxic cocktail laced with methanol hidden in their drink.Without taste or smell, the young travellers had no idea what they’d been served at the bar.Methanol, while closely related to ethanol (which is found in wine, beer and quality spirits) is far more toxic and can be found in drinks made from home-distilled spirits.Commercially made spirits are safe to consume because manufacturers use technologies specifically designed to ensure methanol is separated from the ethanol that goes into the bottles

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Ice Cream Makes You Happy

November 8, 2019

An excellent response to a stupid complaint to the Advertising Standards Authority, a ludicrous ruling from the ASA, and a milquetoast response from the manufacturer.

First, the stupid complaint about an ad outside a dairy noting "Ice Cream Makes U Happy". 

I wonder if E Fowler has ever tasted ice cream. And wouldn’t kids who’ve walked a kilometre from school to the dairy deserve an ice cream?The ASA upheld the complaint. Absolutely absurd, inside-the-asylum stuff:
A majority of the Complaints Board said the advertisement could undermine the health and well-being of individuals. This is because the advertisement contains an implicit claim that there is a link between ice cream and happiness. The promotion of this link could potentially undermine the health and well-being of

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Vaccination, compulsion, and paternalism for the lower orders

November 6, 2019

The National Party has come out in support of encouraging greater vaccination uptake.But it sure isn’t the way I’d do it.National’s suggested docking the benefits of those on benefit whose kids aren’t keeping up with their vaccinations. Some in National have suggested extending that to payments under Working for Families, but that appears more controversial.We can go back to first principles and note that there’s a reasonable case for government intervention to encourage vaccination – as I have done previously. There is compulsion all over the place in public health, except where there’s an actual market failure case for using compulsion.I think that case is strongest when it comes to those workers most likely to be in contact with not-yet-vaccinated youths, and with people whose immunity

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Not an unintended consequence

November 4, 2019

Remember how Labour was elected on a promise to ban foreign speculators from the NZ housing market, then set legislation that was far far broader than that?

Stuff’s Susan Edmunds reports on one of the inevitable consequences of that legislation:A UK-born New Zealand permanent resident says he’s been cut out of the property market by restrictions on foreign buyers, because his job requires him to spend time overseas.Residential land can now only be sold to people who are citizens or permanent residents, with exceptions for Australians and Singaporeans.But people with a residence visa need to meet conditions. They must have a residence-class visa, must have lived in New Zealand for the past 12 months, have been present in New Zealand for at least 183 days of the past 12 months, and be a

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Data preservation?

November 3, 2019

Is there any requirement that public agencies not have data destroyed?Ages back, I’d put in an OIA request of IRD looking for the tax polling data that they had commissioned. If you’ll recall, IRD was accused of partisanship when it had Colmar Brunton run some polls on public views on different taxes, and the polling included some political identification questions for the respondents.I never bought that there was any partisan purpose to the polling – IRD has good reason to want to know attitudes to tax. And political identification questions could simply be part of the standard battery of questions provided in the baseline poll that IRD’s questions were added to.So I OIAed for that underlying data, figuring that the data’s being public would mitigate any worries about partisan use of the

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Public health, externality, and vaccination

October 30, 2019

Paternalism is contentious. Arguments for state action to protect us from ourselves are fraught. I come down pretty heavily on the anti-paternalism side of the argument, but I’ve heard respectable defences of paternalism.

But policy around vaccination is hardly paternalistic. There’s a clear market failure that could be pointed to in any sound Regulatory Impact Statement.In a place with relatively high vaccination rates, the primary benefit from your getting vaccinated goes to other people. The risk of catching anything is low, because everyone else is vaccinated. If you also get vaccinated, you very slightly reduce your already low risk of catching anything. You also very slightly consequently reduce the risk of anyone else catching anything – there’s still risk among those who are

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Locked data filing cabinets

October 28, 2019

Over at Newsroom, I argue for opening up some of New Zealand’s locked government data cabinets as part of government’s maintaining social licence to collect it in the first place. 

Since I’ve been a bad blogger lately and didn’t get this up when it first came out, I’ll put the whole thing here rather than just a snippet. Enjoy!

When Arthur Dent complained that he had not been informed of Council’s plans to bulldoze his house for a bypass, Mr Prosser, the Council officer, calmly told him that the plans had been on display for months – in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’. Arthur found the plans there the day before the bulldozers showed up at his door.A lot of New Zealand’s government data feels

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No collusion

October 27, 2019

The kids still haven’t colluded against us in our sealed-bid tender process for the household chores.
I go through it over in our Insights newsletter. 
The Tender YearsDespite all your predictions to the contrary, the children still have not colluded against me.On finding out that the Crampton household’s way of divvying up the chores is somewhat nonstandard, I reported on it in a May 2018 Insights column in case others might find it helpful. I was honestly a bit surprised that nobody else seemed to have figured out this obvious solution.For specific chores that go over and above the ordinary household expectations, we use a sealed-bid tendering system. We put up the chores we would like to have done; the children submit their bids to perform those chores; we announce the winners of the

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Justice and a grifter

October 25, 2019

Viewed one way, justice has been met.Viewed another way, a serial and malicious grifter has been able to use the legal system and new cultural norms at very low cost to impose substantial costs on others.Jessica Yaniv is a transgendered Canadian woman who bullied aestheticians, often migrant women, with threats of legal action if they refused to wax her scrotum.The Human Rights tribunal came to what I think was obviously the right decision:
"Self-identification does not erase physiological reality," said Jay Cameron of the the Justice Centre. "No woman should be compelled to touch male genitals against her will, irrespective of how the owner of the genitals identifies."The ruling also found that Yaniv engaged in improper conduct by misleading the tribunal, by being untruthful, and by

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Careful what you wish for: tech and democratic accountability

October 25, 2019

It will not be wonderful when every country is able to issue global take-down notices.

Here we go. Now India is ordering platforms to take down information globally based on Indian laws. Which seems perfectly reasonable, since France, Austria, and Canada all get to do it. But that’s exactly the problem: every court in every country will want to do the same thing. https://t.co/5fx6pZCviV
— Daphne Keller (@daphnehk) October 23, 2019
 A lot of folks at NetHui seemed to yearn for a world that would very quickly lead to this.

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Ruling out doing anything about 99.83% of the world’s emissions

October 24, 2019

My column in the Fairfax papers today argues that the Zero Carbon Bill shouldn’t rule out New Zealand pursuing opportunities to mitigate greenhouse gas emissions abroad. 

The Zero Carbon Bill requires the government to focus on domestic mitigation opportunities. But the rest of the world provides 99.83% of the world’s emissions. Does it seem likely that all of the very best opportunities for mitigating emissions will be found here at home? We risk ruling out doing far more good than we otherwise could.A snippet:
I don’t know if anyone ever really believed manufacturing televisions in New Zealand made sense.Controls in place until New Zealand’s reforms prohibited importing fully assembled televisions, to encourage manufacture and assembly in New Zealand. But it resulted in nonsense

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Setting the marker for January – the wealth report

October 24, 2019

Every October, Credit Suisse puts out its report on global wealth. It’s not perfect, but it’s a decent best guess about global wealth and its distribution.And every January, Oxfam comes out with a The Sky Is Falling And Inequality Is Terrible gloss on the Credit Suisse figures. If you were teaching a How To Lie With Statistics course, the Oxfam reports would provide excellent fodder.So, a few highlights from the Credit Suisse report, so we don’t forget them come January when the Oxfam report comes out.The report is here.First up, New Zealand’s place in the global wealth inequality figures.[embedded content](And here’s a static version in case the interactive doesn’t work)

There are 172 countries with a Gini coefficient on wealth. New Zealand’s Gini (in red) is the 37th lowest.Among the

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Afternoon roundup

October 24, 2019

The worthies on a much-belated closing of the browser tabs:Zero waste protesters have been sending their rubbish to MPs using Parliament’s Freepost service. Could the rest of us do the same if central government waste disposal levies make using landfill a bit more expensive than it really ought to be?
Nice piece in The Atlantic on Article 25 of the Constitution, which allows for the removal of a President medically unfit for office. Trump’s speech in which he talked about building a wall in Colorado hasn’t seemed sufficient evidence of his madness for anyone to do anything about it as yet though. 
Manhole always sounded a bit iffy anyway. 
More evidence that flavoured e-cigarettes don’t encourage youth uptake and that there’s no youth nicotine epidemic in America. I hate that moral panics

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