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Eric Crampton

Eric Crampton



Articles by Eric Crampton

The cannabis referendum

23 days ago

I hope that the cannabis referendum passes. It isn’t the legislation I’d have written, but it is preferable to prohibition. Last week, The Helen Clark Foundation and the Initiative co-hosted a webinar with The Brookings Institution’s John Hudak, author of Marijuana: A Short History, about America’s experience with legalisation. You can catch it below. 
[embedded content]Public Address’s Russell Brown covered the webinar here.There’s been a lot of misinformation about what would be allowed under the proposed legislation. I covered some of that in this week’s column for the Stuff newspapers. A snippet:The main scare stories really do not hold up. The legalisation experience abroad counters many of them; the restrictiveness of New Zealand’s proposed framework puts paid to much of the rest.If

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Border testing

24 days ago

RNZ’s Nine-to-Noon had a decent discussion of rapid antigen testing and its potential in helping to open things up. Paul Simmonds suggests a rapid antigen test at the airport before flying (negative test required for boarding), and another rapid antigen test on landing. Those testing negative both times would be considered cleared.I really like rapid antigen testing. But I’d see it, in first instance, as a complement to managed isolation. We’d learn how effective it is, and whether other cases still get through.How could you do this? Run the rapid testing as Simmonds describes. Maintain existing Day 3 and Day 12 PCR tests, but add daily rapid antigen testing in MIQ. They’re not invasive so it’s pretty easy. And add in a requirement that those leaving MIQ show up for a PCR test a few days

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Afternoon roundup

September 25, 2020

The tabs… there are so many of them.A few notes on the closing of the tabs.Tyler Cowen is excellent on herd immunity. Those who urge us not to worry about the virus used to claim that herd immunity would kick in and the virus would burn itself out. Now they tell us not to worry because the death rate has dropped. But herd immunity was supposed to stop case numbers from rising. And even places with lotsa Covid aren’t there yet – other than perhaps at San Quenton. Sam Bowman has a neoliberal agenda for the 2020s: YIMBYism, support for immigration, and carbon pricing (he says carbon taxes, but if you’ve already got an ETS, that’ll do the job). Neoliberalism is a bit of a political swear word. Oliver Hartwich goes through the history of the term – the actual neoliberals were more ‘third

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70%

September 24, 2020

The 2020 Household Income Statistics are out! Well, I’m not sure when they were released, but they’re there in NZ.Stat now. Hit the Incomes tables, then hit "Earnings from Main Wage and Salary Job by Occupation" tab. Median hourly earnings in 2020 are $27.The minimum wage in New Zealand is currently $18.90 per hour.Diving the latter by the former tells me that the minimum wage is now 70% of the median wage. Labour has promised to increase it to $20.We are going into a rather substantial recession.Inflation is low, which means that nominal wage rigidities are also real wage rigidities, amplifying any disemployment effects. Hospitality will have a fair few workers on minimum wage, and we have to expect that collapse in demand for bars and restaurants with the borders being closed will mean

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If you’re going to have an ETS, you might as well use it

September 15, 2020

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

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Even the best case is bad

September 14, 2020

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

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Editing the AI

September 10, 2020

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

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MIQ constraints

September 10, 2020

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

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Arizona dreaming

September 10, 2020

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

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Civic knowledge

September 9, 2020

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.

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Civic knowledge

September 8, 2020

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

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Real rent control

September 7, 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

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Herd Immunity Is Not A Strategy

September 4, 2020

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

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Testing parachutes

September 3, 2020

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

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Quarantine costs

September 3, 2020

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

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Covid and the counterfactual, and the longer term

September 1, 2020

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

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Not enough worst-case thinking

August 29, 2020

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

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Burton on the bureaus

August 27, 2020

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

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Better testing

August 27, 2020

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

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For A Reverse Public Works Act

August 26, 2020

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

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Behind the veil

August 25, 2020

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

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Distancing rules

August 25, 2020

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

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Protecting the Canadian Dairy Cartel

August 24, 2020

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

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Covid and co-morbidities

August 24, 2020

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

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Public Sector Reasons

August 14, 2020

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,

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Better border defences

August 13, 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

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Borders and Bubbles

August 10, 2020

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

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Education departments are weird

August 10, 2020

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

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Mapping Covid in NZ: Genome says?

August 7, 2020

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.

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Things you wouldn’t think need explaining, but somehow still do

August 6, 2020

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

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