Tuesday, 13 July 2010

I read the news today, oh boy

The morning papers today make me angrier than usual.

Item the first. In a couple of op-eds and a piece for Policy, I used a reductio on where the nanny state might next turn: that the "social costs" of skiing, including costs to the health system and emergency rescue services but also lost wages and so on, would be found prohibitive and skiing consequently ought to be banned.

And now we're seeing emergency room doctors calling for mandatory helmet laws for skiers.
Christchurch Hospital head neurosurgeon Martin Macfarlane said he saw "more than several" people a year with brain injuries from skiing or snowboarding.

One or two would die each season, he said.

Macfarlane campaigned to make cycle helmets compulsory in the early 1990s, and he wanted helmets to become mandatory on ski-fields. Making helmets compulsory could save lives and prevent long-term disabilities such as memory loss and paralysis, he said.
I'm sure some shonky outfit could come up with a great big number showing the social costs of skiing, were somebody willing to fund such a study.

Oh: and National Radio's now shilling for mandatory helmets too. They interview the guy who runs Mount Hutt, who favours a national regulation. Quick tip: if you're running a ski field, and you want helmets to be mandatory, you don't need a law to do it. Just make it a requirement at your field. If you won't do it because you think folks will switch to other ski fields, doesn't that tell you something about your customers' preferences and about the loss of utility if we have a blanket regulation? Or do you just think people are really stupid?

Item the second: continued pushes to remove GST from healthy foods.

What's most disappointing on this one? It's the "Science Media Centre" that's sponsored a panel discussion on a tax change, but they've not bothered having an economist on the panel: just public health folks. I think that next year's New Zealand Economics Association meetings should have a panel discussion on the Higgs Bosun where only economists show up to give comment. It'd be great. Then we can have a forum of engineers talking about nutrition and the nutritionists commenting on bridge building. [Update: SMC reports having cast about for an economist but weren't able to find one!]

The Herald's online poll has more than 60% support for the tax change, 24% saying it's too hard to define "healthy", and 14% opposing. iPredict says it has an 8% chance of happening. I do hope National stands firm on this one. We have the cleanest GST in the world. National can't be daft enough to wreck it, can they? At least Peter Dunne, Revenue Minister, reckons the policy to be unworkable.

Yesterday's "Nine to Noon" on National Radio included a lengthy interview with a healthist about the evils of McDonald's Happy Meals and how "marketing" is used to make products sneakily more "attractive to customers". Terrible stuff that, making products that people like. It ought to be banned. Worse, they're on about it again today. Folks need to watch more Penn & Teller....

Item the third: confusing costs and benefits. The case for building more prisons has to be based on that incarceration prevents costs of crime that outweigh the costs of imprisonment, including the costs to the incarcerated of being incarcerated. I don't know which way that study would go were it here to be run: we're on the high end of imprisonment rates when compared to other countries, but we do seem to have problems with repeat offenders. But the case can't be built on the job creation benefits of building prisons. Unless you're Judith Collins:
A new prison to be built in South Auckland will bring $1.2 billion in economic benefits over 30 years, Corrections Minister Judith Collins says.

But she has been criticised for announcing the gains to be had from higher crime and more prisoners.

Ms Collins told the Rotary Club in Auckland yesterday that the 960-bed prison at Wiri was expected to bring 1900 jobs to the region in the next five years.

An economic impact report, commissioned by the Department of Corrections, expected the prison to bring $1.2 billion to the region over its 30-year lifespan.
A helpful reminder for the Corrections Minister - here's Treasury's view, from its excellent primer on cost-benefit analysis (p.43):
5.4 Tips and Traps
The following tips and traps are useful to consider before presenting the analysis to decision-makers:


Have you miscounted the use of real economic resources as a benefit? For example, the costs of building a stadium (materials, labour etc) is not a benefit to the economy. Often the jobs created by such projects are just a transfer from elsewhere in the region or country.
I wonder whether the commissioned report meets Treasury's standards. I wonder who did the report for them. I wonder whether the terms of reference for the report make it clear that the Government just wanted some big number to justify their preexisting policy. And I wonder, given both National and Labour's strong desire for shonky studies backing up their existing policy views, whether Hide's regulatory responsibility bill has any hope of passing in a form that could constrain government against commissioning such reports.

Lindsay Mitchell and DimPost also comment. [added: And No Right Turn]

But, one piece of good news: Roger Beattie's interview on National Radio yesterday.


  1. The excerpt you quote mentions the benefit twice.

    The second time it adds a key word: region. "expected the prison to bring $1.2 billion to the region"

    Isn't this generally accurate, that the region will benefit even if the rest of the country is worse off?

  2. I believe that in the most recent case of someone dying on the ski slopes the person was outside the patrolled area and also fell around 500m. I'm not sure if a helmet would alleviate the damage from that sort of fall.

    As you mention, the ski field owner could just make helmets mandatory on his field if he wishes to combat the perceived risk.

    I'd guess the reason for the ski field owner not making the helmets mandatory at his field is that it would send the wrong signal - "we're a dangerous ski field and therefore not somewhere to bring the kids". On the other hand if wearing helmets is compulsory everywhere then that signal isn't sent as strongly.

  3. @Thomas: It depends what you mean by "benefit". If workers are paid their opportunity costs for work in the prison, then there's no particular benefit. If they're paid rents, then there's a transfer from out-of-region to in-region. I'd really need to read the study to know what they've done.

    @Duncan: I can buy the signaling story. But it's always a bit ambiguous which signal is sent. When Volvo pushed hard on safety, folks didn't take it as "our cars are so likely to get into crashes, we have to build them like tanks so you have any small chance of surviving". I could similarly see an alternative signal sent to parents: "come here, and you don't have to fight with your kids to make them wear the helmets you want them to wear."

  4. Hmm, having looked at the makeup of the Science Media Centre there doesn't seem to be a particularly strong science representation there either, and certainly not from a very wide range of disciplines. I hope they have some good advisors, although if they don't have the collective nouse to find an economist (you're not that rare as a group) I don't hold out great hopes.

    On a totally unrelated topic I note with some interest calls this morning to increase the penalty for killing a police dog to bring it in to line with killing any other (human) police officer. This is so ludicrous that it amazes me even 10% of people would support such a move, let alone the 65% in the (very unscientific) poll on The Rock radio station this morning. Yeah, I know many of their listeners aren't intellectual giants. I'm going to cite 2 reasons why I think this is an idiotic idea, aside from the obvious "it's only a dog" argument.
    1) Criminal incentive - if you're a crim, and you've just killed a police dog, you then realise that no matter what happens from that point on, you're going down for a long time. So there is no disincentive to not escalate your actions, you may as well kill any police or other bystanders that happen to be in the area.
    2) Life expectancy - an average police dog in service probably has roughly 10 years life expectancy remaining. The average police officer probably has (roughly) about 30-40 years life expectancy. Even if we value a dogs life equally (which we don't) killing a human police officer is clearly extracting a much greater toll. I know this is a somewhat flawed argument, we don't differentiate between killing an 80 year old human and a 10 year old human. But it's only a dog people!

  5. I'd be totally cool with the "shoot dog = murder" deal IF it applied to cases where cops shoot dogs routinely when entering a property. This is really common in the States - they've even shot caged Corgis as being potential threats.

    Send link to that proposal. If it's as you've described, it's completely insane.

  6. Sadly I don't have a link at present, it was an impromptu informal poll on The Rock this morning. But I imagine someone will write an ill-informed opinion piece to this end eventually.

    However I've had a conversation about this with one of my workmates who, in my opinion, is a bit of an idiot, and he disagreed with me. He was of the opinion that killing a police dog ought to attract the same penalty as killing a human cop, because, "you know, of the cost to train them, and stuff." I tried pointing out that a police car, fully kitted out and on the road, probably cost more than the dog, and that therefore by his reasoning if I was to blow up a cop car I should do time as a murderer. I also tried to follow his reasoning through to its logical conclusion, and suggested that my life was worth considerably more than his because I'd invested a great deal more money in my training than he has. He didn't seem to agree with that for some reason. As I said, an idiot :)

    That said, I'm saddened by the death of Gage, but if I had to choose between killing a dog or another human being, well, it's a pretty easy choice.

  7. I just posted the report.


    Market Economics did it.

    Also, it explicitly treats the project as a wholly public project.


  8. I wonder how many many paternalists are Caplanesque anti-democrats. It seems odd to think that many people don't know what's best for themselves, but those same do apparently do know what's best for everyone. I suspect you'd get an answer like "Voting is a fundamental right", although they don't seem to believe in many other rights.

  9. Thanks, Keith!

    Henry: That one isn't too hard to square. You can either reckon that folks ascend to a higher plane of being when in the voting booth because they're insulated from their worse tendencies, or you can reckon that they're a small enough minority to be washed out by the rest.