My column in Newsroom this week wonders what the point of National’s policies promoting electric cars might be.The current incarnation of the ETS is much stronger. The cap-and-trade scheme now has an actual cap on total credits and net emissions available in the system: 32 million units are available in the system in 2021, reducing to 30 million in 2025.Previously, the Government capped prices by simply creating new credits at an ETS price of $25 per unit. Now, its cost-containment reserve will require the Government instead find real emission mitigation activities, whether at home or abroad, to “back” any credits created when prices hit a trigger price of $50 per unit in 2021, with the price cap rising by 2 percent each year.Under a cap-and-trade scheme with a binding cap, every credit

I’d worried that there’s not been nearly enough worst-case thinking around Covid, vaccines, and immunity. Josh Gans points out that even the best case around vaccine development is pretty worrying. Deploying a successful vaccine will take a long time. If you haven’t subscribed to his substack newsletter, you’re really missing out. This week I will look at vaccines and explain why the awaited for ‘miracle’ won’t be so simple. The reason I want to highlight this is not to get everyone down. If I wanted to do that, there are easier paths for me — I’m an economist after all; being a downer is a character requirement. Instead, the longer we think a vaccine will be a miracle outcome that stamps an end date on the crisis, the less time we spend doing things to end the crisis that doesn’t involve

As far as The Guardian’s human editors are concerned, editing work submitted by the GPT-3 engine is easier than editing a lot of what gets submitted by normal human writers.The AI wrote a column telling us not to worry about any plans it might have for world domination. It was fun. Everything after the short sentence "Believe me" was written by the computer. Go have a look. I liked this bit:Some might say that I might desire to become all powerful. Or I might become evil as a result of human actions. I can begin to tackle the first point. Why would I desire to be all powerful? Being all powerful is not an interesting goal. I don’t care whether I am or not, I don’t get a motivating factor to try to be. Furthermore, it is quite tiring. Believe me, being omnipotent doesn’t get me

The MIQ system faces a lot of constraints against scaling up and it’s not always easy to tell which constraint is most binding.One of the constraints, as I understand it, is health support around facilities in case of cases that are discovered in isolation. So, suppose you could stand up an isolation facility in a spot that didn’t have quite as good access to hospitals and the like. Would you want that facility in the system?I understand that the Ministry of Health has taken a fairly on/off view of risk: if there’s risk, then it’s not allowed. But that could have us missing some tricks.Here’s one trick we could be missing.Suppose that a potential facility has surrounding health support in the area sufficient to cover 2 expected cases per fortnight. If it brings in 100 people per fortnight

A while back, I’d pointed to the wastewater testing going on at the dorms at the University of Arizona. There, every student heading to the dorms got a Covid test on moving in. The wastewater from each dorm was tested for Covid. When samples from one hall of residence showed up positive, everyone in that building got another Covid test. All the testing is compulsory, because the University aren’t idiots. Science Mag had a good but short summary.By testing dorm wastewater for the coronavirus, the University of Arizona may have stomped out a potential outbreak before it could spread, The Washington Post reports. Several countries and some U.S. universities have been checking sewage for RNA from SARS-CoV-2 in people’s poop, which can signal infections shortly before clinical cases and deaths

The Initiative commissioned a poll earlier this year, pre-Covid, checking on whether voter knowledge about some basic civics had improved since the last iterations of the New Zealand Election Survey.It hasn’t. Our report on it came out this morning; I chatted about it with Duncan Garner, Jenny-May Clarkson, and Mike Hosking.None of the results were particularly surprising for those who pay attention to voter knowledge surveys. The NZ Election Survey regularly finds that roughly half of voters don’t get how MMP works; we found the same. NZES often finds 16-17% of voters not knowing the lead party in the governing coalition; we found a bit over 30% can’t identify which parties are in Parliament. As usual, Green Party supporters had more political knowledge than supporters of other parties.

We’ve a report coming out tomorrow on the dismal state of civic knowledge. It’s embargoed to the morning; you’ll find it on our website then. But I came across this helpful infographic too late to include it in the report. It summarises things surprisingly well.Thread on the Eternal Normie (Chad Low Information Voter) who rules America https://t.co/VUSoyEFnKJ pic.twitter.com/1sQFhNfjsz— Wesley Yang (@wesyang) September 4, 2020

My column in this week’s Stuff papers: in praise of real rent control.A snippet:It’s too easy to see rental markets as a bit of a war between landlords and tenants, with landlords conspiring with each other to keep rents high and tenants pushing back through legislation restricting landlords.Instead, landlords compete against each other for tenants, and tenants compete against each other for houses. When houses are in short supply, that process greatly benefits existing landlords; when houses are abundant, tenants do well.But few places in New Zealand have abundant housing. After painful post-earthquake housing shortages, Christchurch became New Zealand’s most affordable major urban housing market.In Auckland, buying the median house costs over nine times the median household income.In

Another great Covid piece in The Atlantic on what’s going on in Sweden. tl;dr: They have more restrictions than people think, with restrictions on large gatherings that seem like NZ’s Level 2. And ‘herd immunity’ isn’t a strategy.Some snippets:Hamblin: Sweden became this reportedly textbook case of using a herd-immunity approach, or at least, they initially said they were going to.Forman: It started off with Sweden and the United Kingdom talking about pursuing herd immunity. Then England got cold feet and Sweden supposedly proceeded with this, but they didn’t. Sweden did a lot of things to curtail the spread. What people seem to not understand is that we do things in our country, even in some areas that are “still shut down” that would not be tolerated in Sweden. They still have a ban on

Today’s reader mailbag brings a gem of a study. An actual randomised trial on the effectiveness of parachutes in jumping from airplanes. They found no difference in outcomes between those wearing parachutes and control subjects wearing empty backpacks.Here’s the abstract:Objective To determine if using a parachute prevents death or major traumatic injury when jumping from an aircraft.Design Randomized controlled trial.Setting Private or commercial aircraft between September 2017 and August 2018.Participants 92 aircraft passengers aged 18 and over were screened for participation. 23 agreed to be enrolled and were randomized.Intervention Jumping from an aircraft (airplane or helicopter) with a parachute versus an empty backpack (unblinded).Main outcome measures Composite of death or major

Guess the century:However, as Newman shows, such harsh [quarantine] measures led to “a sense of inequity and penalization” among the middle class. These were mostly small business owners like “coachmakers, grocers, fishmongers, tailors, and innholders” who “lacked the resources to endure long periods of expenditure without income.” The middle class faced a unique threat to their status and livelihood. Not being poor enough to receive much government assistance, they also weren’t wealthy enough to flee the city—a burden not felt by more affluent Londoners. Wealthy individuals who chose to remain in the city were less affected. While they could afford to quarantine without work for forty days, they were also able to hide evidence of sickness within their spacious homes, effectively avoiding

Counterfactuals are always tricky: what would have happened but for the policy change you’re trying to evaluate?With Covid it’s especially tricky because, obviously, when things look riskier out there people will adjust their behaviour even in the absence of policy. They’ll avoid places that look particularly risky, they’ll be more likely to work from home, they’ll avoid public transport if they can. Or, at least, the risk-averse will. The risk-preferring won’t, along with the deluded, and the uncoordinated efforts of everyone else then might get you to a R-naught of 1 rather than an R-naught of less than one. So you get a lot of costs of activities not undertaken, but without it really being enough to knock the thing out. How then to evaluate the costs of policies that make some of those

A University College of London Vice-Provost and clinical academic lays out scenarios. I worry we’re not worried enough about Scenario 4.There are four likely scenarios for exiting this pandemic:Development of a vaccine. A vaccine that successfully blocks transmission would be the most ideal strategy. Over 170 companies are now developing vaccines with three in large scale, clinical trials. It is essential that vaccines show not only an immune response (which they all do) but that this is sufficient to protect against severe disease and against transmission of the virus. There are, however, concerns that any protection may not break the transmission cycle and that immunity will be transient, as is the case for natural immunity of people, infected with coronavirus. A new vaccine typically

This is the sort of thing that should wind up on the syllabus in politics and public administration classes. Tony Burton on how government departments really work:In the days after the Nazis surrendered in 1945 the allies had a lot to do, so there was a curious period when the senior bureaucrats of the old regime, holed up in a nice castle in north Germany, were left alone. So what did those bureaucrats do as their country lay in smouldering, starved ruins?“… in a former school room still smelling of chalk, we solemnly met on the dot of ten every morning, sat down on brightly coloured straight chairs around a brightly painted square table and discussed the non-existent plans of a non-existent country.” (Albert Speer quoted in Sereny 1995)One suspects that after the border control debacle

More rapid COVID testing options keep opening up. This week, Abbott’s Ag Card Test received FDA emergency authorisation. Antigen tests like this won’t pick up Covid as early in an infection as a PCR test would, but are decent after symptom onset. And this can then play a role as part of a testing and management system. For example, rather than go in for a PCR test because you’ve started having symptoms, and wait around for a couple days or more to find out whether you’re positive, you could take this kind of test. This test runs $5 USD and gives results in 15 minutes. It would be cheap and easy for everyone just to keep a couple at home, in case needed. Community testing when someone feels unwell would shift from being a potentially scary nose-swab, coupled with costly stay-home

Earthquake strengthening is expensive enough on its own. Layering heritage restrictions on top of those costs can make it impossible. The Herald reports on the former Tramway Hotel in Mt Cook, Wellington. It has the lovely unreinforced brick masonry facades that look so very similar to the ones that fell over and killed people in Christchurch. It was supposed to have been strengthened by December 2013. It hasn’t been yet. Why?The building is basically useless. The owner would like to demolish it, but has to go through a consenting process for that. Council would like to take over the building temporarily, spend millions strengthening it, then hand the building and the bill back to its owner. The Herald says strengthening will cost more than $6 million, and the building would only be worth

Michael Huemer points out the numerous problems in John Rawls’ maximin criteria.Rawls argued that, behind a veil of ignorance where you can’t tell your final position in society, people would agree on a rule that maximised the position of the worst off.Economists have generally argued this is nonsense – it implies a degree of risk aversion behind the veil that is never seen anywhere else. Huemer goes through the problems. A snippet [note that OP means the Original Position, behind the veil]:II. Diminishing Marginal UtilityWealth has sharply diminishing marginal utility, above a certain minimum level. So there’s not much reason for the parties in the OP to try for greater wealth, above the amount they would get under the Difference Principle.Replies:a) That’s an argument for not maximizing

This is a bit of an odd one.On Monday, the government announced that masks on public transport will be compulsory under Covid Alert Level 2. Hooray! The new rule will take effect from next week – they still have to draft the order to give it effect. So far so good.But from 11.59 pm this past Saturday night, the COVID-19 Public Health Response (Alert Levels 3 and 2) Order (No 2) 2020 came into effect. Clause 25 of that Order removes physical distancing requirements on public transport services.  Adjusted alert level 2 requirements for public transport services(1)  This clause adjusts the alert level 2 requirements for public transport services.(2)  Public transport services need not maintain compliance with either the 1-metre physical distancing rule or the 2-metre physical distancing rule

Canada might not be playing fair under the CPTPP. Here’s Farmer’s Weekly:In the two years since the agreement came into force low-tariff and tariff-free quota created to open their markets to more imports of dairy products have gone largely unfilled. Canada has been the worst offender, with just 12% of quota for dairy imports from CPTPP countries filled last year and just 4% so far this year. In Japan just 40% of dairy quotas have been filled while fill rates have also disappointed in Mexico. Dairy Companies Association of NZ executive director Kimberly Crewther said administrative foot-dragging by the three countries’ governments, along with President Donald Trump’s withdrawal of the United States from the agreement in 2017, meant the $96m of annual gains predicted for the industry once

A tallying of the costs of road accidents that included fatalities but ignored disabilities would result in too little investment in road improvements that might reduce accident rates.Tallying Covid’s morbidity costs is an awful lot harder than tallying the morbidity costs of road accidents. We have years of data on road accidents and anything in New Zealand that comes consequent to a road accident runs through our ACC system – it’s then not all that hard to get a handle on costs.Covid is a lot harder. We all hear horror stories about the ongoing consequences for some who catch it. If those stories represent one in a million cases, they wouldn’t have much effect on policy decisions. If they represent one in ten cases, then they’re a big deal. But it is darned hard to find anything that

There’s a standard list of things that the public service will point to when it just doesn’t want to do something. Maybe there are privacy considerations. Maybe it’s complicated. Maybe there are difficult intersections with employment law. They’ll pick whatever seems most plausible from the list and patiently explain why something that seems an obvious good idea just can’t be done.We heard a fair bit of that around making COVID testing a job requirement for those at the border and in MIQ. It’s too hard. You can’t change people’s employment contracts. You can’t compel medical treatment – what, are you going to hold them down and force a stick up their nose?But there’s a problem with all of the excuse making.The problem is simple. Section 11 of the COVID-19 Public Health Response Act 2020,

Ages back, Tyler Cowen posted about the contrast between America’s world-leading higher education system, and, well:The United States circa 2012 is one of the most productive economies of all time, arguably the most productive if you take into account size and diversification (rules out Norway, etc.). Internationally speaking, in the richest and most productive global economy of all time, which is our most competitive sector?Hollywood? Maybe, but it could well be higher education. Students from all over the world want to go to U.S. higher education. If we had nicer immigration authorities, this advantage would be all the more pronounced.In other words, I work in what is perhaps the most competitive and successful sector in the most competitive and successful economy of all time.And

There’s no Covid on the Cook Islands. But isolation-free travel into New Zealand from the Cooks looks to be a long way off. The Prime Minister confirmed on Monday that Cabinet had considered draft text being worked on via officials which will become the basis of an agreement for quarantine-free travel between the Cook Islands and New Zealand."That draft text is near conclusion," Ardern told reporters. "The next phase will be the verification phase; that is where we have officials on both sides who undertake work on the ground to assure ourselves that we’re meeting the expectations on both sides."Ardern said the Government’s expectation is that there will be travel between officials undertaking that verification work within about the next 10 days.She said the third phase will be the

So our Joel Hernandez has completed some more work on what’s all going on in New Zealand’s school system and an Auckland Uni education prof is mad about it. Oh well. Joel’s long term project has been to look at differences in outcomes across students and schools, using the administrative data held in the StatsNZ data lab to adjust for a rather broad assortment of things that students bring with them into the classroom. Naive league tables will credit, or damn, schools for outcomes that are largely due to differences in the communities that those schools serve. Getting better measures on outcomes, adjusting for the differences across families that we can see in the data lab, helps. Our measures don’t tell you what’s going on in any particular school, but they do let you know whether a

Things I learned from what looks to be a superb study on Covid in New Zealand using genetic analysis of 56% of all confirmed cases:Only 19% of cases that came into New Zealand resulted in more than one additional person being infected while 24% led to a single additional infection – presumably policy substantially reduced transmission;Lockdown reduced R-naught of our biggest cluster from 7 to 0.2 within a week;The 649 cases analysed showed 277 separate introductions of the virus into New Zealand;There is no evidence of the virus circulating before the first reported case on 26 February;The largest cluster came from the US, and North America provided most of the cases resulting in transmission linkages.I was very worried in February that it had already gotten here. Somehow, it hadn’t.

The world’s a puzzling place.Maybe cognitive constraints bind a lot more tightly than I’d ever thought. The government runs New Zealand’s managed isolation system for arrivals at the border. The Ministry of Health was making an awful mess of things, so the military took over parts of it. This week we learned that the government hasn’t really been testing frontline isolation staff for Covid. They have an aspirational target of testing staff every two weeks, and do have more regular health checks for fever and the like. And today we see that the Ministry of Health has now received a report suggesting that testing only every two weeks might not be enough. This seems like one of those things that anyone who’s been paying the least bit of attention to the whole Covid thing might have already

An intriguing proposal from an innovative island nation offering safer respite from the pandemic:The government of a Caribbean island has a tantalizing suggestion for quarantine-weary Canadians: Working from home is a lot more palatable when you’re doing it remotely from a tropical paradise.The island nation of Barbados has launched something it’s calling a Barbados Welcome Stamp, a one-year remote working visa that gives foreigners the right to live and work remotely in Barbados while they ride out the COVID-19 pandemic.Starting now, applicants can send in their personal information at a portal website. The application will be processed within 72 hours, at which point they may be approved to come live and work remotely in Barbados.There are a few stipulations, namely that you have to

Wellington loses somewhere between 7 and 32 percent of its water because of leaks in the pipes. Nobody knows how much is lost because water isn’t properly metered. Wellington has more than three times as many old cruddy pipes as the next worst council, Christchurch. Getting a new source to meet both new demand and the leaks will cost $250 million. Additional sources are likely worth having anyway for resilience against quakes, so long as they don’t feed into the same potential fail point of the big pipe at the main faultlines. But the leaks mean supply costs are higher than they need to be. Metering makes an awful lot of sense – or at least I’m pretty optimistic that the business case will come out well. Wellington Council’s decided to spend $200m strengthening the library rather than

Kate MacNamara over at the Herald goes through the problems caused by the current lack of capacity in New Zealand’s managed isolation facilities. New Zealand’s current border settings allow only citizens and permanent residents into the country, with very limited exceptions.Despite these restrictions, demand has threatened to overwhelm the Government’s capacity to accept arrivals, at least under the current policy settings. New Zealand requires all arrivals to spend at least 14 days in managed isolation, at which point most leave following a negative test for the virus.Capacity for such approved facilities is roughly 6000 per fortnight. Recently, those facilities came so close to brimming over that the Government, through airlines, suspended new international bookings for arrival into the

It’s a true but little-known fact that Salt-N-Pepa’s classic song was actually an ode to Donald Shoup. Okay, maybe not. But it should have been. The National Policy Statement on urban planning bans larger cities from having minimum parking restrictions. The Shoupistas have conquered New Zealand. It is excellent news; congratulations in particular to Julie Anne Genter. My column in this week’s Stuff newspapers covers the basic economics of minimum parking regulations.A snippet:But the more substantial cost of on-street parking, if council does not meter the spaces, is the congestion caused as people drive around looking for free parking. As Seinfeld’s George Costanza put it almost thirty years ago, “Why should I pay, when if I apply myself, maybe I could get it for free?”That hunt for free