Thursday , August 22 2019
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Eric Crampton

Eric Crampton



Articles by Eric Crampton

Mind Fixers

6 days ago

The Spinoff has a superb piece by Danyl McLauchlan reviewing Anne Harrington’s Mind Fixers. Thomas Szasz makes an appearance. A snippet:

In January of 1973 the psychologist David Rosenhan published an article in Science, one of the world’s most influential academic journals, titled ‘On Being Sane in Insane Places’. He’d conducted an experiment in which eight people (including himself) presented to twelve different psychiatric hospitals across the US, complaining of audible hallucinations: the words they claimed to hear were specifically chosen because they didn’t correspond to anything in the published literature linking them to psychotic symptoms. They were all diagnosed with either schizophrenia or ‘manic depressive psychosis’ and committed. Upon admission they started behaving

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Cricket and Collaboration

6 days ago

Matt Lowe’s job market paper coming out of MIT looks excellent. And I love that he markets it with a tweetstream.

🚨 Revised JMP on intergroup contact 🚨Some (me) wondered whether this day would ever come. To celebrate I’d like to tell a story about cricket, caste, and different types of intergroup contact. Are you sitting comfortably?https://t.co/VwMC3ulRj31/N pic.twitter.com/GELj6yRjgM
— Matt Lowe (@hmmlowe) August 15, 2019

Sri Lanka has finally finished their first innings in the test against New Zealand, so you’ve time to give the paper a read:

Types of Contact: A Field Experiment on Collaborative and Adversarial Caste Integration
Matt Lowe
Abstract
I estimate the effects of two types of intergroup contact: collaborative and adversarial. I randomly as-signed Indian men from

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Roskam on RBNZ’s Shock and Awe

7 days ago

John Roskam over at the Australian Financial Review:

While Lowe hasn’t ruled out “extreme unconventional policy measures” at least he hasn’t yet embraced them as his counterpart across the Tasman Sea appears to have. Last week the Reserve Bank of New Zealand cut interest rates by 50 basis points to a record low of 1.0 per cent in a move described as “Shock and awe Kiwi style”. The decision prompted the production of a research paper from New Zealand’s leading think thank, the New Zealand Initiative, entitled The Unreserved Bank of New Zealand – Why unorthodox monetary policy needs boundaries. While there are differences between the responsibilities of the two countries’ central banks, nearly everything the paper says about the Reserve Bank of New Zealand applies to Australia. It should

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Some sense from Emily

7 days ago

More oddities from the Coroners’ Office brings a response from Emily Writes over at The Spinoff – and from 400 doctors!

Yet pathologist Dr Simon Stables and Coroner Debra Bell could not ascertain Sapphire’s direct cause of death. Somehow, as we have seen before with coroners, this has been translated into a blanket message for mothers. This time it’s not to have alcohol if you’re breastfeeding. This is an easy comment to make – as popular as “don’t let your child walk to school” or “don’t ever co-sleep”.This time, however, a groundswell of medical professionals have hit back. More than 400 doctors have so far signed an open letter to the coroner expressing their concerns at the judgement and questioning whether the amount of alcohol in Sapphire’s system could have been ingested through

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Burton on Stats

7 days ago

Tony Burton’s back on deck with another column over at The Spinoff, this time on the problems at StatsNZ.

You’ll probably enjoy reading the whole thing.
Here’s an extended snip
In itself the review is great. The public service response, not so much. Government statistician and Stats NZ chief executive Liz MacPherson has stepped down, but she was merely unlucky enough to be the boss when the most public of many, many Stats NZ initiatives was mishandled. In my view she has sacrificed herself for the greater complacency of the state services commissioner.The Stats NZ website camouflages its failure behind a forest of initialisms: the New Zealand Progress Indicators (NZPI); Indicators Aotearoa New Zealand (IANZ); the slow and clumsy introduction of the Integrated Data Infrastructure (IDI);

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Preparing for the monetary rocky horror

7 days ago

Over at Newsroom (ungated), I discuss the importance of RBNZ being very clear about its intentions should it find itself in a position to pursue unorthodox monetary policy.
As Doctor Frankenfurter prepared to step up the reactor power input three more points and bring life to the Rocky Horror in the classic Rocky Horror Picture Show, he welcomed the assembled “unconventional conventionists” who would witness his triumph.Unconventional monetary policy is a bit like Doctor Frankenfurter’s giant defibrillator experiment with the Rocky Horror. It could work, if the circumstances call for it. Preparing for those circumstances can make a lot of sense. But it probably should not be tried except as a last resort. And it seems a bit odd to assemble everyone for a throwing open of all the switches,

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Mixing up the heroes and villains

8 days ago

Sometimes, it feels like media is in a bizarro world, where the good guys are the bad guys and vice versa. 
Over at Newsroom, the influence of developers in local politics is a worry:
More importantly, according to Simon Chapple, the director of Victoria University’s Institute for Governance and Policy Studies, the claim that property developers are just amplifying the voices of people they agree with doesn’t stack up. “You can rule out ideology, because they’re donating to everyone.”Chapple isn’t overly worried about shady deals being negotiated in smoke-filled backrooms of the Wellington Club. Instead he believes that, “The money isn’t buying a specific decision. It’s building a relationship – one where your interests are mutually coinciding.”When Chapple first heard the numbers, he

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Of Cinderella, vaping, and decent regulatory frameworks

11 days ago

Over in my Dominion Post column, I take a Peter Huber twist on vaping regulation. One of the things I love about my column over there is that they keep all the out-links. So when I note work by Huber, I can link it. 

Eighties glam-metal band Cinderella taught us we don’t know what we’ve got until it’s gone. But it can be harder to know what you could have had if you never had it at all.We can thus be thankful the regulatory framework for vaping and reduced-harm tobacco alternatives is coming only after a lot of Kiwis have been able to stop smoking thanks to vaping. But those vapers will need to step up to ensure they do not lose what they now have.Regulatory expert Peter Huber distinguishes between two types of regulatory agencies. Some are charged with regulating existing risks. Others

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But how many divisions might the Ombudsman have?

15 days ago

Ben Thomas explains how MMP coalition politics provides more ways for a government to avoid the Official Information Act. If conversations between Ministers in Cabinet were actually conversations between the spokespersons of the two different parties about the areas of their party responsibility, even if they write it all up on official Ministerial letterhead, then they can pretend that it’s not subject to the OIA.The whole article is excellent; do have a read. If you wanted a model op-ed for English writing assignments, this is a good one. Ignore the bolded teaser at the start that a Spinoff editor would have added; the structure’s perfect.When I was griping on Twitter about how the Official Information Act can’t enforce itself and that governments can and will get away with this

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Quote of the day: Draghi edition

17 days ago

ECB governor Mario Draghi raised concerns over the appointment of the new Central Bank governor, Gabriel Makhlouf, directly with the Minister for Finance Paschal Donohoe, the Sunday Independent reports. The paper says the concerns centre on the fact Makhlouf has no experience working in a central bank and is not an economist.
From the Irish Times. And is not an economist.Isn’t it nice that there are central banks out there who think that expertise in monetary and macroeconomics is important in Central Banks? By contrast…

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Afternoon roundup, and around the traps

20 days ago

The worthies on the closing of the browser tabs.Nice comparison of vacant housing to transitional unemployment, in an American context. Filing this one away here for the next time somebody notices a few empty houses and decides that policy should do something about it. It comes up too often. 
Susan Edmunds over at Stuff looks at household income distributions; the piece includes a short bit from me on AHC- and BHC- incomes. 
Universities need to lift their darned game. 
AUT not only caved at the last minute to pressure from the Chinese Embassy to pull the rooms booked for a memorial event for the Tienanmen Massacre, they also (and I just cannot stress enough how stupid this is) failed to redact the name of the lecturer who had booked the rooms when the documents were released under OIA. I

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Sad

20 days ago

Emily Brookes’ piece on the tragic Carla Neems case lets Nathan Wallis wander all over the place, including here:
Wallis stressed that no blame should be placed on Neems’ parents for her death – "the last thing they need is a bloody coroner’s report saying it was kind of their fault" –   and said they were victims of a society "that doesn’t value children very much and is all run by the Business Round Table.""We’ve created an economic situation where it’s impossible to buy a house in New Zealand without having two parents go to work," he said. "Then how on earth are we expected to have someone there to walk (kids) to school every morning and pick them up every afternoon? It’s an impossible situation for people."
I didn’t know Roger Kerr well; he was the Business Roundtable. I met him once

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Real insurance. Not that pretend stuff.

22 days ago

I keep wishing for an insurance product that doesn’t exist.Every year, pay an annual premium. If an earthquake hits Wellington during that year of sufficient Mercalli magnitude, you get cash payment immediately. You have automatic right to renew the policy for the subsequent year; the insurer has to provide a year’s heads-up that it will no longer be providing the policy at the current policy price. That latter bit’s to avoid the case where you’ve bought the policy every year, then the insurer stops issuing insurance when an earthquake not quite big enough to trigger the policy is a foreshock for a bigger quake to come.It’s a simple policy. The annual contract price would be the annual risk of an earthquake, which GNS here assesses at 0.83% per year (for the type of quake against which

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Abolish coroners

23 days ago

Edgeler nails this one.

Abolish coroners https://t.co/BgPdDb2mDv
— Graeme Edgeler (@GraemeEdgeler) July 30, 2019
Recall that coroners in NZ operate under crappy legislation that invites them to speculate about measures that might prevent identical cases in future, but putting zero weight on practicability or cost-effectiveness or sanity.NZ coroners have made a lot of nutty calls based on this. I’d put together a list a few years ago:
Search Google NZ for "Coroner recommends" and you’ll find:Coroner recommends quad-bikes be equipped with rotational towballs
Coroner recommends that all farm houses be fenced off. "Mr Scott called for farmers and Labour Department officials to lobby the government to make fencing compulsory on all farms"
Coroner recommends age restrictions on butane and

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Plastic and landfill

23 days ago

I expand on this weekend’s post over at Newsroom Pro ($).

A snippet:
Modern landfills are constructed to deal with any leachate from the disposal of plastics. Fees charged at the tip are designed to ensure that the landfill covers its costs. When those fees are set properly, all of the costs of waste disposal are incorporated into the price each of us pays for a council rubbish bag or for a trip to the dump – including the cost of the land purchased for the tip.Contrary to the usual stories of shortages of land for landfill, fairly simple back-of-the-envelope calculations show it would take thousands and thousands of years before lack of land for landfill became anything close to a problem. The more relevant problem is ensuring that tips are properly constructed – land is a small part

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Haidt comes to the Outside of the Asylum.

23 days ago

I’m looking forward to Jonathan Haidt’s visit to New Zealand. Sounds like he’s also looking forward to it too.

I’m on my way to New Zealand. Looking forward to learning about the only English speaking country that seems to not overprotect its kids. I’m giving a talk thurs eve in Auckland, tickets here:https://t.co/CzWfrMHbQ1
— Jonathan Haidt (@JonHaidt) July 29, 2019
We’re still the Outside of the Asylum.

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Why you’ve had to dumb down your syllabus

25 days ago

From the latest issue of Intelligence:
We examined trends over time in vocabulary, a key component of verbal intelligence, in the nationally representative General Social Survey of U.S. adults (n = 29,912). Participants answered multiple-choice questions about the definitions of 10 specific words. When controlled for educational attainment, the vocabulary of the average U.S. adult declined between the mid-1970s and the 2010s. Vocabulary declined across all levels of educational attainment (less than high school, high school or 2-year college graduate, bachelor’s or graduate degree), with the largest declines among those with a bachelor’s or graduate degree. Hierarchical linear modeling analyses separating the effects of age, time period, and cohort suggest that the decline is primarily a

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Plastics and health

27 days ago

The Royal Society has a short report out on plastics. I don’t think the takeaways I’ve gotten from it are quite what they’d have wanted.My takeaways:Plastics in the ocean are bad (duh).
Synthetic fibres and fragments coming out of polyester and such in the laundry – I’d never thought of this before. Similarly, tyre wear winds up in storm drains and then to the ocean. No obvious ways of dealing with this. 
Well-constructed landfills are the absolute safest place for plastics. When we send plastics abroad for recycling, they risk blowing off the boats into the ocean, or being dumped and winding up in the ocean. I take from this that it is strictly better to put my plastic waste into the council rubbish bag for the landfill rather than risk its heading into recycling streams that may head

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Great Kleiman quote

28 days ago

The New York Times obit for Mark Kleiman is excellent. Here’s the conclusion:

“If you do drug policy and you’re asked whether you use drugs, you’ve got two choices,” he replied. “You can say, ‘Yes, I’m a lawbreaker. Please come arrest me and ignore everything I say, because I’m a bad person.’ Or ‘No, actually, I don’t know what the hell I’m talking about.’“Since neither of those is an advantageous admission,” he added, “I don’t answer the question.”
The Drug Foundation hosted Kleiman a few years ago; it’s where I first heard about the 24/7 programme that seems rather effective in reducing the harms caused by harmful drinkers.

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Youth Parliament and fixing the housing market

July 23, 2019

New Zealand’s Youth Parliament called me in to provide testimony about policies that could improve economic growth without worsening disparities in wealth. 

I suggested that they take a close look at housing markets – as well as regulatory structures that work to stymie competition and entrench existing interests. The Committee of the Youth Parliament took up some of my recommendations in their report – along with some of the recommendations from the presenter from Living Wage Aotearoa. The hearing was a lot of fun. Since the witness from Victoria University of Wellington failed to show up, the Committee prodded me and the other witness into arguing with each other – I had a blast.I went through the case on housing in my inaugural fortnightly column over at the Dom Post; I expect it’s

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IRD polling and the Official Information Act – Updated

July 23, 2019

Back in February, Stuff reported on IRD’s polling about attitudes to tax. The poll was controversial because it included questions on respondents’ ideological self-identification.  

I never took the polling as having been undertaken with partisan intent – I’d thought that the left-right identification question came from the standard battery of questions included in that poll, with IRD’s questions added to that battery. So I was rather more interested in IRD simply releasing that polling data to avoid any potential appearance of partisan advantage that might obtain if anyone expected the government had access to the poll data while the opposition did not – and because it would just be cool to have that data. You could imagine that, in the context of policy argument around capital gains

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Around the traps

July 23, 2019

Blogging has been light as other commitments have pressed, but you may have caught me around the traps:I pointed to Stats NZ’s disaggregated CPI figures in this piece by Susan Edmunds over at Stuff. 
"Statistics New Zealand recently began releasing cost-of-living statistics for different groups to take account of differences in spending patterns. Since they started doing that, they have found that increases in the cost of living have been most sharply felt by the poorest because tobacco excise increases, petrol price increases and housing costs there have the worst effects. And these are areas directly under the government’s control. Ceasing punitive tobacco excise increases and fixing the regulatory settings to allow new housing be built would substantially affect living costs for the

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Morning Roundup

July 22, 2019

The closing of a big set of browser tabs brings a few gems.Rohan Pearce at Computerworld notes a warning from the Law Council of Australia that Oz’s encryption law breaks a few international privacy standards, and could then come into conflict with GDPR. 
Jacob Sullum at Reason goes through some shonky anti-vaping research that claims vaping causes heart attacks, but that ignores that the heart attacks happened before the smokers switched to vaping.
Shoeshine over at the NBR warns that woke investment strategies do not always pay off. I particularly wonder about NZX here. NZX’s report on Corporate Social Responsibility suggests that boards with stronger gender diversity show higher returns – but the academic literature says there is no effect. And there’s now a Kiwisaver Fund that makes

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Stats and IDI funding

July 18, 2019

Stats don’t come for free. Who should pay? 
Newsroom covers budget problems over at Statistics NZ.
An appendix document to Shaw’s February briefing raises the prospect that, without extra money, some Government priorities – surveys on social statistics, child poverty, and the household labour force survey – might have to stop.Stats NZ, which employs more than 900 people, seems keen to cut surveys rather than staff. It says budget constraints “would limit our ability to ensure remuneration kept pace with the market, and Stats NZ would lose capability”.(For the year ended June 30, 2018, Stats NZ’s personnel costs were $115 million, up from $83 million the year before. The census accounted for 81 percent of the increase. This year’s estimate, contained in the last annual report, is for an

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Demotion, or second chance?

July 8, 2019

My Newsroom column from last week looks at the Twyfortunity in the cabinet shuffle – belatedly posted here as I was off at the NZAE meetings last week. 

Cabinet shuffles provide great journalistic set-pieces.For the politics-as-sport contingent, it provides all the narrative arc of changes to the Black Caps line-up for the World Cup: winners and losers, who’s in and who’s out, and whether the changes will do more to help the team score political runs or to defend against the Opposition’s bowling attack.As expected, the Government’s changed the housing line-up. Megan Woods became Minister of Housing; Kris Faafoi took over public housing; Nanaia Mahuta took responsibility for Māori housing; and Phil Twyford took up Urban Development and Economic Development. Sporting commenters framed it

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Is this subsidiarity?

July 8, 2019

Subsidiarity is the principle that different levels of government should handle the tasks for which they are best suited. 

If you think about it with a bit of public economics in mind, you can see it as siting policy and regulation at the level that best internalises whatever externalities are at play. It makes little sense for central government to decide on whether a stop sign, traffic light, or roundabout is the best traffic management option in some local neighbourhood; local governments shouldn’t run their own monetary policy. 

The Initiative has been pushing for greater subsidiarity and better frameworks for aligning local council incentives. Councils frequently, and rightly, complain about unfunded regulatory mandates from central government that do not suit local

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Taxing tobacco in a world of vaping

July 1, 2019

If you’re in Auckland, come catch me in a LEANZ panel discussion on tobacco tax, along with Marewa Glover and Peter Wilson. 

Here’s the blurb; register at the link above.
Tobacco taxes are both an important source of revenue and an attempt to deter behaviour that can lead to social costs (e.g. healthcare costs from both active and passive smoking). Even in a world with just traditional tobacco products such taxes may not be as effective as their advocates would wish, leading to higher-quality products (e.g. filtered cigarettes) being substituted with lower-quality ones (e.g. unfiltered roll-you-owns). They can also be regressive, harming vulnerable communities like Māori, and in a “well-being” world, how do we balance pleasure and harm?Like many other sectors, the tobacco industry is

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Burton on the OIA

July 1, 2019

Tony Burton, ex-Treasury Deputy Chief Economist, lays out some of the problems in the OIA over at The Spinoff.He describes an incident in which a minor letter from him to DoL in preparation of the annual minimum wage review became, after an OIA request, well, this:
As a Treasury adviser on labour market and welfare issues I was asked to see if DoL could be encouraged to improve the report. I thought, naively as it turned out, that if I discussed evidence in bite-sized chunks some of it might sneak into the report. This was the content of my email. Labour market economists would regard what I wrote as anodyne. They would not all agree with it – academics never all agree on any matter – but it would be unexceptionable. The DoL officials ignored my email and the subsequent meeting when

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Meth and availability cascades

June 30, 2019

Over at Stuff, Susan Edmunds goes through the meth testing mess in which ridiculously tight standards were taken as a requirement. 

I provided a minor bit of comment on it:
Eric Crampton, chief economist at the New Zealand Institute, said it was probably a snowballing moral panic that went something like this."Nobody wants meth users as tenants. They’re too high risk."Some at Housing New Zealand started applying far too stringent a test. It’s easier to make those kinds of mistakes when it’s on the public’s account rather than coming out of a landlord’s own back pocket."That then started triggering news stories about meth contamination, making the issue salient for others. Some tenants started demanding them, and some landlords started running them, taking the Housing New Zealand example

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Regulatory icebreakers

June 30, 2019

Me in Friday’s NBR ($) on Uber and ice-breaking:

Not too long ago, Canada’s Northwest Passage was effectively unnavigable. The ice was simply too thick for sailing ships to make it through during the too-short summers.And while Netflix’ excellent miniseries The Terror brings an additional supernatural element to the horrors of being icebound on the Royal Navy’s Arctic expeditions of the mid-1800s, the reality was awful enough.It took more modern icebreakers, and global warming, to make the route more viable.And for one part of the global regulatory pack-ice, it took Uber.Imagine, if you will, a heavily armoured icebreaking cargo ship designed to plough through the Northwest Passage. Once the path through the ice is cut, other ships can follow more easily. The icebreaker will get its

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