Sunday , January 26 2020
Home / Offsetting Behaviour

Offsetting Behaviour

This New Zealand based economics blog was created by two economists, Eric Crampton and Seamus Hogan. They explore a range of fascinating topics from sports economics to housing and much more. Sharp and easy to follow analysis.

Routing around the regulatory damage

I rather like this entrepreneurial response to the Reserve Bank's loan-to-value-ratio regulations.Recall that the Bank required that banks issue no more than a small proportion of home loans to lenders with less than 20% equity.I expected that this would have folks finding alternative sources of finance to help get to that 20% mark. Some will have family that can help, but not everyone.And here's a market response.[embedded content]YouOwn will put up some of the initial equity and take a...

Read More »

Good advice, if they’ll take it

Treasury gets this absolutely right. You don't need feebate schemes for electric cars or emission standards for CO2, you just need carbon prices. MoT employees worked hard to convince Treasury that there was a rationale for extensive intervention in the light vehicle market through the use of a feebate scheme and the imposition of an emissions standard, which almost every other country has. Treasury officials repeatedly argued that such policies could be costly and would have a limited...

Read More »

The tender years

I go into a bit more depth, over at Newsroom ($), on our tendering system for the household chores. I wonder whether it will catch on among econ-minded parents. A snippet: Back in 1968, economist Friedrich Hayek wrote that competition is a discovery procedure. Some information about the world simply would not exist without the process of market competition that discovers it.Parenting is a discovery procedure too – some information about it is difficult to acquire without going through the...

Read More »

Public health, risk communication, and vaping

The editorial in the January 2020 issue of Drug and Alcohol Review worries that poor communication around illness caused by vaping illicit THC-based products in the US has risks: The US investigation is still ongoing and the health authorities investigating the outbreak have not definitively identified the exact chemical that has caused the lung damage, which may be a chemical formed from vitamin E acetate. However, over the past 6 months, the evidence has strengthened considerably that...

Read More »

Healthy living through alcohol

The government's otherwise-banal guide to wellbeing had some rather misleading advice around alcohol.  I've covered the J-curve pretty extensively here. Long story short, moderate alcohol consumption reduces your risk of all-source mortality, even after adjusting for all of the objections that the temperance folks like to throw at things.  So the better answer is that moderate drinking comes with negative risk.  The latest from the British Medical Journal provides further...

Read More »

Mileage may vary

I wouldn't have expected this. And I couldn't make any sense of it until I saw the line "investments in complements to production" and thought about it for a second. And then it made sense.The World Bank's released a policy working paper on the effects of cash and in-kind food transfers in Mexico on student learning. Here's the abstract: This paper studies the medium-term impact of early-life welfare transfers on children’s learning. It studies children who were exposed to the randomized...

Read More »

A healthy puzzle – PHARMAC and health insurance

Here are a collection of stylised facts about health insurance in New Zealand. At least I think they're stylised facts. Call them Eric's perhaps-incorrect understanding of the world.Together, I wonder if they make sense.The public health system covers a lot of stuff, and PHARMAC subsidises the most cost-effective drugs; There are lots of newer drugs that PHARMAC doesn't subsidise. It can take a while for drugs to be registered with MedSafe for use in New Zealand, it can take a while for a...

Read More »

Parentonomics

My column for next week's Newsroom will go through a bit of econo-parenting. I wanted to check my earlier review of Josh Gans's excellent "Parentonomics", but found it had disappeared down an internet memory hole; it had been in the Christchurch Press in 2008. I've dredged it up from my Google Drive archives and am posting it here. Review of Parentonomics As with most things in life, it comes down to a cross-price elasticity. If you're a careful parent who's made sure that sugary and fatty...

Read More »

Minimum wages and employment

Stuff's Susan Edmunds asked me for comment on the employment effects of the latest round of minimum wage hikes. She chose the right quotes out of this more verbose missive I'd sent through, copied below.  “Minimum wage hikes always bring argument about the effects of those increases on jobs. MBIE regularly provides estimates of the number of job losses likely to be caused by different levels of increase; this time, MBIE expected that the increase to $18.90 would reduce employment by about...

Read More »

Creating urban commons problems

If you weren't already familiar with the 9th Circuit ruling in City of Boise vs Martin, and you've been aghast at the stories coming out of San Francisco, you might want to read this LA Times piece by the Manhattan Institute's Stephen Eide.  On Monday, the Supreme Court announced it would not review City of Boise vs. Martin, a 2018 ruling handed down by the San Francisco-based 9th Circuit Court of Appeals. In Martin, the appeals court struck down prohibitions on sleeping and camping in...

Read More »