Elitist teasers

I started reading Arts & Letters Daily when I was in grad school. When I moved to Christchurch, I got to meet Denis Dutton, the man behind the pithy one-line teasers that drew me into the web of literate conversation.

When his health was fading, I helped him out a bit with material and wrote a couple of teasers. 

Dutton was BuzzFeed before there was Buzzfeed. But a version that piques intellectual interest rather than the mawkish awfulness that now populates the bottom-trawling footers of news sites.

The difference between BuzzFeed and ALD is why I'm an elitist. Pity the fool who wouldn't be tempted by this kind of clickbait:

ACT ONE: A street in Cambridgeham. Most Exalted Professor, freshly returned from the Land of the Asian Khan, rattles the door of his keep. Enter a WENCH: “Alarum! A Thief!”... more»

General knowledge, from capital cities to key dates, has long been a marker of an educated mind. Now every dope can Google facts... more»

Junk anti-consumerism. Even the most fashion-conscious teenager is less obsessed with consumption than today’s critics of the open market... more»

Would for a world in which ALD teasers could generate as much traffic as Buzzfeed does. Don't hate Buzzfeed for what it is. The problem is much worse than that. Buzzfeed wouldn't exist if a substantial portion of the population weren't wired to hit those buttons. Despair of that instead.

When you're sick of Buzzfeed, head back to ALD. Much there yet abides under Evan Goldstein's careful editorship. In today's edition:

Polarized by political and cultural sensibilities, Americans are a fractious bunch. But one thing they can agree on: the apocalypse... more» 

Other fun ones:

Got civilization? Europe's longtime cultural dominance is due in no small part to a genetic mutation that mitigated lactose intolerance... more»

Dickens as dad. He bestowed on his children grand baptismal names and great expectations. He experienced only disappointment... more»

When intellectuals attack. F.R. Leavis’s assault on C.P. Snow was either an ad hominem travesty or a masterwork of cultural criticism... more»

First came the spiritualists, then the Oneidists, suffragists, abolitionists, Mormons. What was it about upstate New York in the mid-19th century?... more»

Every aspect of higher education has been corrupted by monopolies, cartels, and other predators. A scandal, sure, but so predictable... more»

The epics of Homer, the poems of Sappho, the tragedies of Sophocles were all, originally, set to music. What did they sound like?... more»

Go on. You know you want to.  

Drinking Ed.

In the latest ODT, Jennie Connor makes a series of interesting claims.

Let's take them in turn.

She says ''education and persuasion strategies'' are popular with policymakers, governments and the public ''because it seems to make sense''.

''The problem with them - they don't work. There's no evidence that they work.''

And, that, she says, is an ''international consensus'', based on research done on thousands of educational programmes.

I've certainly not read thousands of studies on educational programmes around alcohol. I've seen meta-analyses that include about thirty. Things like D.A.R.E. seem pretty useless.

But some other programmes seem reasonably effective, depending on what your desired outcome is. In colleges, it's often been pretty effective to simply put up posters advising students of what the actual drinking rates are. Social norms are often set by the visible extroverted drunks. Simply telling people things like "Most (81 percent) of Montana college students have four or fewer alcoholic drinks each week" can let people adjust their consumption to meet the actual norm rather than the perceived one. Where people base their own behaviour on their perception of social norms, and where they think it's pretty normal to get hammered regularly (rather than relatively rare), just telling them the actual stats on their classmates' alcohol (or tobacco, or drug) consumption can help ground social norms in actual moderate behaviour. Now, if your goal is to eradicate drinking, this will hardly work. But these kinds of interventions seem to work to reduce harmful drinking habits.

Alan Berkowitz writes on this "social norm" approach:

Perkins and Craig (2002) conducted the most thorough and comprehensive evaluation of a social norms marketing campaign. Their intervention combined a standard poster campaign with electronic media, an interactive web site, class projects that developed parts of the campaign, and teacher training for curriculum infusion. It was begun in 1996 at a college with higher than average alcohol use. Multiple evaluations that were conducted determined that: 1) increases in drinking that normally occur during the freshman year were reduced by 21%; 2) previous weeks’ high risk drinking decreased from 56% to 46%; and 3) alcohol-related arrests decreased each year over a four-year time period. Corresponding reductions were also found in misperceptions of use, heavy drinking at a party, and negative consequences associated with alcohol use. Surveys conducted at three time periods over a five-year period indicate successive linear decreases in all of these measures over time. 

I'm not sure I'd be as quick as Connor to write off the effectiveness of some of these kinds of programmes. Sure, D.A.R.E. sucks. But posters in college dorms reminding folks that it isn't normal to get drunk all the time, where they're grounded in actual data about those students' peers, seem at least somewhat effective.

Back to Connor:

Prof Connor says educational programmes raise awareness there is a problem with alcohol.

''And they have no effect on behaviour.

''Even some of the programmes that show a modest amount of effect on drinking in the short term, it doesn't last.

''There is no evidence of any sort of education programme that produces a real change in hazardous drinking or harm.''

Prof Connor says education does not work for smoking, eating fast food or any kind of health behaviour.

The norms campaigns above, or at least according to Berkowitz, seemed to have continued effectiveness. These kinds of programmes were also recommended in Sunstein and Thaler's "Nudge".

It also depends a lot on what your effectiveness measure is. Suppose that you observe that, when we give people a lot of information about the number of calories in different items at a fast food restaurant, they don't change their consumption much. An economist might then conclude that it's less likely that "lack of information" were driving consumption choices and would reckon it more likely that the observed consumption decisions reflected reasonable consumer preferences. A public health person might conclude that the programme failed and that stronger measures were needed.

Interestingly, recent work also suggests a reasonable turnaround in Americans' food consumption behaviours, and especially away from calories-from-beverages, chalking it up to public health efforts.

Connor continues:

Prof Connor believes if New Zealand is to reduce the harm done by alcohol then it needs regulations to rein in the alcohol industry - things like a reduction in the number of pubs and earlier closing times for on-licences.

''There is plenty of good evidence that if you close on-licences, pubs and stuff, earlier, you have less crime.''

Boy, I wish that these kinds of articles would link to sources. I can't fault Connor for that though. You have to be awfully careful in work looking at pub locations and crime. Pubs want to locate where there's reasonable night-life; those places would attract crime even absent the pub. And, if pubs are closing because nightlife's moved on to other venues, you could get reverse causality. But I've not yet looked closely at this literature.

And she is an advocate of more tax on alcohol to make it more expensive. ''There's absolutely no doubt, putting the price up reduces consumption, reduces the consumption even of the very heavy entrenched drinkers, it certainly reduces consumption by young people, it reduces the amount of physical health harm and it reduces the amount of violence and disorder.

''And it doesn't cost much to do.''

This one, I know about. And Connor's dead wrong. Alcohol demand is relatively price insensitive. What price sensitivity there is mostly comes from light-to-moderate drinkers. Heavy drinkers don't much respond to price measures; binge drinking doesn't much respond to price measures. If you raised petrol excise to $50/litre, you'd probably cut down on drag racing, but you'd devastate normal commuting. This is the kind of policy Connor here is proposing, and that she doesn't think costs very much. If you count the harms done to moderate consumers, it costs a lot.

Prof Connor believes the generation that liberalised alcohol laws has let the country's young people down.

''The chronic heavy drinkers are all older. These are the people young people are learning from. They see it's OK to drink large quantities of alcohol.

...''When you liberalise the law, people just drink more. They drink heavily and in a very messy way.''

While I agree that the baby boomers have a lot to answer for, especially around housing market regulation, it is simply wrong to suggest that liberalisation of the alcohol laws made things worse here. A chart from a few years ago, originally from Kiwiblog:

There was a sharp increase in total alcohol consumption per capita from 1970 through the early 1980s, then a sharp drop from 1985 through the late 1990s, and a pretty stagnant trend since then. I expect that much of the rise from 1970 through 1985 was women catching up to men's drinking habits. Darned hard to see any negative effect of alcohol liberalisation in the aggregate consumption data. And most other "bad stuff" trends seem to be dropping too. The drop in the alcohol purchase age from 20 to 18 didn't worsen anything of consequence either.

And I worry about the continued denigration of supermarket alcohol availability. A lot of craft brewers would have a much harder time getting product out to consumers were it not for friendly stockists at the local New World and Fresh Choice supermarkets.

I agree with Connor on one bit, though. She says that you shouldn't let your kids see you drunk. I agree. It's one of the reasons we bring the kids with us to the University Staff Club every Friday night. They there can see, regularly, how decent people interact with alcohol: moderate normal social consumption among friends, with kids running around and playing in the gardens. I hope that they grow up to follow that example.

Auckland Uber

So Uber's looking to expand into Auckland. This is great news.

I had thought that regulations around taxicabs might stop them.

Any taxicab in New Zealand must have 24-hour dispatch and must have a suitable camera monitoring device. Any vehicle that can be flagged down counts as a taxi. Uber's dispatch system might count as suitable 24-hour dispatch support, but the camera installation would block any part-time folks from entering the market with their own vehicles.

However, there's also a very nice "Private Hire" designation. Those vehicles cannot accept casual hires but must instead be booked in advance. I expect that Uber's booking service would meet this requirement, but I am not a lawyer. The driver may not use a taxi meter to determine the fare - again, Uber should be fine. Drivers would need to put up a driver identification card, and Uber would be responsible for ensuring that these meet spec. Sections 3 and 6 of the Code would apply.

I expect that drivers would have to get a P endorsement on their drivers' licences, which requires taking a course and passing a test. So current cabbies could flip to Uber in their own cars, retired cabbies who still have the P endorsement could start up again, and others willing to sit the test could come into the market.

I also expect the Taxicab Federation to have a fit and demand that Uber come under taxi licensing.

Auckland Uber, after all.

Petrol tax:speeding :: alcohol tax:binge drinking

If you want to reduce binge drinking, excise tax rates are a remarkably blunt instrument. We don't use petrol taxes to curb drag racing; we shouldn't think that alcohol excise is a great solution to binge drinking.

I'd posted last year on a nice Australian study by Byrnes et al who found that tax increases did a lot to curb light and moderate drinkers' consumption, but did little to stop binge drinkers. Heavy drinkers did respond to the price hikes, but only by cutting back on their light drinking days. They still binged on the weekends.

Was that study representative? A new metastudy by Jon Nelson says so. Jon went through 56 papers examining the effects of alcohol taxes or prices on binge drinking and found very little effect. He writes:

A large body of evidence now indicates that binge drinkers are not highly-responsive to increased prices or taxes, and may not respond at all. Nonresponsiveness holds generally for younger and older drinkers and for male and female binge drinkers alike. Increased alcohol prices or taxes are unlikely to be effective as a means to reduce binge drinking, regardless of gender or age group.

Nelson notes that a lot of alcohol policy papers suggest prices as effective mechanism against binge drinking. Livingston's review, quoted by Nelson, looks a lot like the Law Commission's review of the effect of prices on heavy drinkers from a couple of years ago. Nelson on Livingston:

A recent review by Livingston (2013, p. 374) argues that “many critics of alcohol taxation suggest that it fails to affect problematic drinkers [but] this is not supported by the literature, with studies showing that both young people and heavy drinkers respond to price changes.” A Global Strategy report of the World Health Organization (2010, p. 16) states that “. . . increasing the price of alcoholic beverages is one of the most effective interventions to reduce harmful use of alcohol.” These and similar statements tend to be based on limited literature reviews or econometric studies that focus on population-level demand, and not alcohol demands by individual binge drinkers and other heavy/excessive drinkers.

 And me on LC:

The LC cites a WHO study arguing that heavy drinkers are no less elastic than other drinkers. A quick check shows the WHO is looking at 2-3 studies while the above-linked one [me citing Wagenaar] is a meta-study of more than a hundred, with results that are near identical to another meta-study of similar magnitude. The latter, forthcoming in the Journal of Economic Surveys, doesn't give a breakdown between heavy and light drinkers, but has near identical estimates of average elasticity. I give a heck of a lot more weight to a serious meta-study, and especially when two of them give near-identical results, then to a couple of pieces picked from the potential list. If there are more than a hundred studies, you can always find a few that give you numbers you like.

Looking more closely at the Law Commission's preferred WHO finding, ... wow. Terrible work.

While heavy drinkers are sometimes thought to be likely to be less affected by price, the Committee found that the evidence does not support this belief, with higher prices affecting the amounts consumed by frequent and heavy drinkers. This finding is supported by a large body of evidence which has shown an impact of prices on harms caused by alcohol, also indicating therefore that heavier drinking has been reduced (34). Natural experiments that have occurred recently in Europe as part of changes required as consequences of economic treaties have shown that as alcohol taxes and prices have been lowered, so sales and alcohol consumption have increased (37). In some jurisdictions in Europe, special taxes have been introduced for spirit-based sweet premixed drinks, in response to increases in young people’s drinking (38). These have led to reductions in sales and consumption of the specific drinks.

Nothing in the paragraph supports the WHO's argument. Nothing. Demand curves slope downwards, that's all they're saying. All groups are somewhat elastic in that demand drops when price increases. The question at hand is whether moderate drinkers reduce their consumption by more than do heavy drinkers, and they provide zero evidence supporting their opening claim. I cannot see how the Law Commission dismissed the findings of the meta-study based on this paragraph.

Why does this matter? There are a whole pile of price-based regulations that get recommended because of potential effects on binge drinking: alcohol minimum pricing, alcohol excise, banning price discounting at bars (happy hours), for example. Nelson finds they don't really do much, whether for youths, young adults, or adults. Some fun results from field experiments:

The natural experiments examine tax reductions on beer and wine (Hong Kong), spirits (Sweden, 14 Switzerland), and all beverages (Finland). Tax cuts range from 100% in Hong Kong to about 30-50% in Nordic countries. A study for Finland by Helakorpi and colleagues (2010) finds mixed effects on binge drinking, while four other studies report null effects on binge drinking and heavy drinking more generally. In some cases, empirical results appear to be dominated by existing trends toward less binge drinking, which are not offset by tax cuts and reductions in alcohol prices.

There are four field studies for the United States, one for Australia, and one for the United Kingdom. Varied price measures are examined: free alcohol at events (2 studies); price discounting such as pitcher specials, drinking game discounts, and buying rounds (3); fixed fee/ cover charges for all-you-can drink (one study); and average price comparisons by drinking level (one study). A study by Clapp and colleagues (2003) reports null results for free alcohol, but Wagoner and colleagues (2012) find that free drinks increase binge drinking by both genders.

Thombs and colleagues (2009) report that fixed-fees increase chances of intoxication among college students, but other price promotions are not significant. Stockwell and colleagues (1993) reports null results for price discounting among young adults in Australia, while Jamison and Myers (2008) and O’Mara et al. (2009) report mixed results for binge drinking and intoxication. Overall, this is a mixed set of results. Four United States studies use college student respondents, so results can be compared to seven studies using Harvard CAS data. Three CAS studies report that fixed fees increase binge participation (Powell et al., 2002; Wechsler et al., 2000; Weitzman et al., 2003), but three studies also report null results for fixed fees or free drinks (Williams et al.,2005; Wolaver, 2007; Wolaver et al., 2007a).

A few further points:

• The cutoff for binge drinking in the NZ data is 5 standard drinks for youths and 7 for adults. Seven standard drinks is more than I would have in a typical session. But a half litre of Renaissance Scotch Ale, at 7%, is 2.8 standard drinks. Say you get to the Staff Club at 4:30 on a cool winter's day and have a pint. Then you have another at 6. Then you have a half-pint at 7:30. You've just had a binge drinking session, and you've very likely not gotten drunk. Sure, it's more than you should have on average every night, but you don't go to the Staff Club every night, do you? Binge drinking encompasses a range of drinking patterns both harmful and (relatively) harmless.
• There's been a fair bit of recent media talk around the burden of drunks in the emergency department. I'd love to know how much of that could be reduced by having a separate facility, staffed by a paramedic and a cop, where drunks with minor injuries, or who are too intoxicated to drop anywhere else, could be kept until they're sober enough to release. Put a fee for service on the facility so it recoups its costs. It's no surprise that emergency room doctors get fed up with obnoxious drunks who get dumped there. Question is why we're leaving so many there for so long rather than moving them on to far less costly holding facilities. 

Unstable equilibria: Conan Doyle edition

Gordon Tullock saw the equilibrium in Competing for Aid: the most pitiable beggar will be the one drawing the rent, and so all will compete to be the most pitiful.

Conan Doyle didn't. From The Man with the Twisted Lip's dramatic climax (spoiler alert for those who haven't read it):

“You are the first who have ever heard my story. My father was a schoolmaster in Chesterfield, where I received an excellent education. I travelled in my youth, took to the stage, and finally became a reporter on an evening paper in London. One day my editor wished to have a series of articles upon begging in the metropolis, and I volunteered to supply them. There was the point from which all my adventures started. It was only by trying begging as an amateur that I could get the facts upon which to base my articles. When an actor I had, of course, learned all the secrets of making up, and had been famous in the green-room for my skill. I took advantage now of my attainments. I painted my face, and to make myself as pitiable as possible I made a good scar and fixed one side of my lip in a twist by the aid of a small slip of flesh-coloured plaster. Then with a red head of hair, and an appropriate dress, I took my station in the business part of the city, ostensibly as a match-seller but really as a beggar. For seven hours I plied my trade, and when I returned home in the evening I found to my surprise that I had received no less than 26s. 4d.

“I wrote my articles and thought little more of the matter until, some time later, I backed a bill for a friend and had a writ served upon me for £25. I was at my wit’s end where to get the money, but a sudden idea came to me. I begged a fortnight’s grace from the creditor, asked for a holiday from my employers, and spent the time in begging in the City under my disguise. In ten days I had the money and had paid the debt.

“Well, you can imagine how hard it was to settle down to arduous work at £2 a week when I knew that I could earn as much in a day by smearing my face with a little paint, laying my cap on the ground, and sitting still. It was a long fight between my pride and the money, but the dollars won at last, and I threw up reporting and sat day after day in the corner which I had first chosen, inspiring pity by my ghastly face and filling my pockets with coppers. Only one man knew my secret. He was the keeper of a low den in which I used to lodge in Swandam Lane, where I could every morning emerge as a squalid beggar and in the evenings transform myself into a well-dressed man about town. This fellow, a Lascar, was well paid by me for his rooms, so that I knew that my secret was safe in his possession.

“Well, very soon I found that I was saving considerable sums of money. I do not mean that any beggar in the streets of London could earn £700 a year—which is less than my average takings—but I had exceptional advantages in my power of making up, and also in a facility of repartee, which improved by practice and made me quite a recognised character in the City. All day a stream of pennies, varied by silver, poured in upon me, and it was a very bad day in which I failed to take £2.

“As I grew richer I grew more ambitious, took a house in the country, and eventually married, without anyone having a suspicion as to my real occupation. My dear wife knew that I had business in the City. She little knew what.

If one could have earned a great living in London by being an excellent object of pity, other beggars would have used self-mutilation as substitute for our Mr. St. Clair's make-up skills; it must then have been St. Clair's particular rhetorical skills that drew the rent. Perhaps St. Clair is better considered a busking performance artist in a winner-take-all market. But it still seems a pretty unstable equilibrium.

Moar kids

Overshadowed (predictably) by Lorde's Grammy wins was Labour's policy announcement. Should Labour form government, they'd like to pay parents $60 per week for the first year of the child's life. 95% of children are meant to be covered by the plan, which is not income contingent for the first $150,000 of family income but abates to zero immediately at $150,000. Parents of 2 and 3 year olds would also receive up to $60 per week. Those with family income less than $50k/year would receive the full $60/week for the extra two years, abating to zero by $80k annual income for those with one child and somewhat more slowly for those with two or three children.

The policy will likely increase fertility rates. We can look to two decent studies for evidence. First, Josh Gans and Andrew Leigh found that an Australian baby bonus programme induced a very strong timing effect: women delayed giving birth until 1 July, when the programme came into effect. This suggests that people do respond to these kinds of incentives, but it doesn't tell us whether the programme increased total fertility or just affected the timing.

Of more relevance for present purposes, Kevin Milligan found that Quebec's baby bonus increased fertility in Quebec relative to that in other provinces for the duration of the programme. For those without NBER access, here's the CD Howe summary. Canada's federal system provided him a nice way of running difference-in-difference to be able to infer causality. While the programme mostly paid families for children they would have had anyway, he did nevertheless find a substantial effect on fertility. He writes:

...the estimates suggest a strong, positive, and robust impact of the policy on fertility. In the model containing the full set of control variables, the fertility of those eligible for the new program is estimated to have increased by 12 per cent on average, and by 25 per cent for those eligible for the maximum benefit

As the Quebec programme's intention seemed to have been to produce more Quebecois,* Milligan figured out the cost per child-who-would-not-otherwise-have existed. It cost about $15,000 per additional child. Is that value-for-money? Depends what you think a child is worth. I think life is worth at least that much to each of the children who wouldn't otherwise be born, and that New Zealand is so far below optimal population size that it would be a bargain, if results here were similar.

Milligan also found some really interesting demographic effects.

Suppose your model of the world is as follows. Poorer people have lower IQ on average and are more likely to be income-constrained against having another child. We might then expect that a lump sum baby bonus, like Labour's, and like Quebec's, that doesn't scale with income, would differentially encourage poorer people to have more children. Then, this.

Milligan found instead that the greatest policy effect on fertility was in the middle income ranges - those earning $50,000 or so in Canadian dollars at the time. The poorest groups didn't see much fertility increase. Milligan speculates that the group either didn't know about the policy or were farther away from being at the margin where another child would be desired. There also was less fertility response among rich cohorts, for whom income would not have been the binding constraint anyway.

Some of the demographic separation could be due to the structure of the Quebec programme. After the programme was made a bit more generous in 1992, it paid $500 on the birth of a first child. The birth of a woman's second child also generated a $500 payment as well as another $500 on that child's first birthday. Things got far more generous for larger families: third and subsequent children drew twenty quarterly payments of $400 ($31/week) for a total of $8000. Milligan then, as expected, finds the largest effect on the likelihood of a woman's bearing a third or further child. Where the very poorest women cannot afford a first child, a $500 payment is unlikely to change things much. Only those who were more affluent to start with could afford to reach the hurdle necessary for accessing the payments for very large families.

We then shouldn't conclude that the differential fertility effect will necessarily hold under Labour's proposed scheme, which provides fairly generous payments for any newborn regardless of parity. As Labour's proposed payments for children after their first birthday abates quickly for families earning more than $50,000, we might expect a humped effect where there would be little effect on fertility decisions among the very poorest cohorts, rising effects up to $50,000, then attenuating effects thereafter. I wouldn't be surprised to see negative fertility effects in the upper-middle income cohorts due to income effects, but that would depend on how Labour finances the scheme.

The tldr; summary then:

• Labour's programme is near certain to increase total fertility rates, regardless of how much snark leftie folks on Twitter want to throw around about "Oh, would you want to take care of my kid for $60 a week then?" They're nuts to suggest it won't happen. You don't need the programme to cover all the costs of child-rearing - you just need that some people had just barely decided against having a(nother) kid due to the cost and that these people change their mind under the new programme. I hate seeing tweets from people who know better pretending the opposite. You're not idiots - why pretend to be idiots on Twitter? Go read Kevin Milligan. 
• We should perhaps worry less about "Oh, well, poor people are just going to have a pile of kids in order to draw the payments then, and anybody who'd decide to have a kid on that basis is exactly the kind of person who shouldn't be a parent." Milligan's results suggest that they don't, but we need to be very careful on that one as we just don't know what would have happened if the Quebec payments had been really generous for first and second children. It's possible that Matthew Hooton's right here and that there will be a strong fertility response among the poorest cohorts. 
• One way of perhaps checking which is more likely here to hold: does anybody yet know whether the changes to the Sole Parent Benefit had any effect on fertility? The rules recently changed such that women can defer the Sole Parent Benefit's work requirements by having an additional child every few years. 
• It would be worth MSD's keeping an eye on whether there's been this kind of effect. It would be pretty bad if the programme really did start creating kiddie-mills.

Other observations:

• Bill Kaye-Blake is right that the $150k family income cutoff is a bit odd. 
• I would love to see somebody put together a new Effective Marginal Tax Rate schedule incorporating Labour's proposed changes. The abatement rates from $50k-$80k household income are pretty sharp. We'd also see a very large EMTR spike at $150k: the $1 that pushes you from $149,999 to $150,000 in family income will cost you $3120 if you have a newborn. 
• Because of the large EMTR effect based on household income for those with newborns, I expect this will induce many second-earners, predominantly women, to spend longer outside of the labour force on the birth of a child. We'd see this in higher-earning couples, where the second-earner's income pushes family income above $150,000, and in middle-earning couples in the high abatement ranges. 
• The plan's proposed extension of paid parental leave to 26 weeks will intensify the effect above. Consequently, small businesses may be more reticent to hire women of prime childbearing ages. The costs of bearing a half-year's likely leave are not trivial for employers. The wage gap will consequently increase. Sadly, National's jumping onto this bandwagon as well. 

* Milligan infers this from the increasing payment schedule. As there are economies of scale in child-rearing, a model designed simply to compensate for child-related costs would have a large payment for the first child, with lower payments thereafter. Political discourse at the time, if I recall correctly, was entirely pro-natalist. Citizens and Permanent Residents had access to the payments, immigrants who hadn't made PR weren't. Quebec nationalists later blamed "money, and the ethnic vote" for the failed sovereignty referendum; breeding more pure-laine was a potential solution.

Pernicious housing equilibria

Homeowners are the worst.

Living in cities lets us reap the benefits of agglomeration: being near others in similar or complementary industries makes each of us more productive. Wages are higher in cities not because of the cost of living but rather because people are more productive there - otherwise, firms would just move out to the sticks. Higher productivity in cities is what allows the cost of living there to be higher.

In the latest AEJ: Microeconomics (ungated), Ortalo-Magne and Prat build a nice little model explaining how urban homeowners manage to appropriate the agglomeration gains. They invest in housing, then vote against any policy that would allow the supply of housing to increase, whether from suburban growth or increased density. When cities can't grow up or out, prices go up.* The better the city, the stronger the incentive for homeowners to start siphoning out the agglomeration gains via restrictive housing policy. Here's their political economy mechanism:

...we assume that (i) adding a house to a city requires a building permit, and that (ii) local residents have a say (vote) on the number of permits to be issued every period. The issue of building permits affects voters through three channels. First, new housing construction reduces their housing rents for the remainder of their lives. Second, lower future rents imply an immediate drop in the price of their housing investment. Third, voters may capture some benefits from any windfall gains deriving from the new construction permits if permits are sold to developers and the revenues are used for local services (for example).

 ...We find there are stationary equilibria, where a city is below its optimal size, yet the median cohort and all older agents oppose urban growth because they have made sizeable housing investments. Agents also continue to invest heavily in housing, because they expect the majority to oppose urban growth in the future. Before they made purchase decisions, all agents would have preferred a larger city, so that housing would have been cheaper and more people could have located there but the equilibrium is sustained because the median voter is someone who already owns housing.

They find that subsidising housing encourages greater investment in housing and greater homeowner opposition to urban growth, making housing even more expensive. Other implications:

• Moving land use authority away from local governments and up to central government shifts the identity of the median voter and reduces the rentiers' power;
• Splitting up cities into multiple smaller competing jurisdictions can facilitate greater housing supply: basically, the permit fees paid by a developer are split across the smaller number of people in the smaller jurisdiction, but the capital losses from lower house prices are spread over the broader jurisdiction. 

So: don't amalgamate cities. If you do, you'll need to have a central government putting a strong boot to the throat of local councils to force them to ease up on land supply. We're starting to see some of the latter in New Zealand.

* I'm sure I stole this line from Ed Glaeser.

Free-range experiments

New Zealand schools are pretty free-range relative to America: no security guards, playground equipment that would have been banned in America a decade ago, pot-luck community lunches without freaking out about allergies or health inspection of parents' kitchens.

Maybe they're not free-range enough.

Ripping up the playground rulebook is having incredible effects on children at an Auckland school.

Chaos may reign at Swanson Primary School with children climbing trees, riding skateboards and playing bullrush during playtime, but surprisingly the students don't cause bedlam, the principal says.

The school is actually seeing a drop in bullying, serious injuries and vandalism, while concentration levels in class are increasing.

Principal Bruce McLachlan rid the school of playtime rules as part of a successful university experiment.

"We want kids to be safe and to look after them, but we end up wrapping them in cotton wool when in fact they should be able to fall over."

Letting children test themselves on a scooter during playtime could make them more aware of the dangers when getting behind the wheel of a car in high school, he said.

"When you look at our playground it looks chaotic. From an adult's perspective, it looks like kids might get hurt, but they don't."

If you don't know what bullrush is, think of a tackle version of red-rover. Here's a video from the experiment's initiation last year.

And it gets results:

Swanson School signed up to the study by AUT and Otago University just over two years ago, with the aim of encouraging active play.

However, the school took the experiment a step further by abandoning the rules completely, much to the horror of some teachers at the time, he said.

When the university study wrapped up at the end of last year the school and researchers were amazed by the results.

Mudslides, skateboarding, bullrush and tree climbing kept the children so occupied the school no longer needed a timeout area or as many teachers on patrol.

Instead of a playground, children used their imagination to play in a "loose parts pit" which contained junk such as wood, tyres and an old fire hose.

I hope this rolls out more broadly. I would love LOVE to see this as an RCT and watch the effects on child obesity. If you ban everything except sitting down, you'll get fat kids.

I can't wait to read the final write-up.

Thick markets: Gunnamatta edition

I'd not heard of contract brewing before moving to New Zealand. The craft beer scene started taking off here not long after I arrived in 2003. Brewers would start off in their garages. Then, they'd have to invest in kit to build up a proper brewery or brewpub. By 2008, or thereabouts, the market had thickened up enough to allow a new innovation: contracting for the use of spare capacity in others' plants. This was great for everybody: brewers making capital investments could leave themselves room to grow while renting out currently excess capacity to new upstarts, while new guys could come onto the market without having to raise a pile of money for stainless kit.

And now one of New Zealand's star contract brewers, Yeastie Boys, is heading off to London.

A 50,000 litre batch of beer brewed especially for one million United Kingdom punters has local craft beer brewery Yeastie Boys fizzing at the prospect of tapping into more offshore markets.

But the Wellington-based "virtual" company is conscious of exporting too much beer and losing touch with the local scene, as it looks to establish a physical venue soon.

Last week Yeastie Boys announced it had received one of only 10 worldwide invitations to brew at the JD Wetherspoon's International Real Ale Festival in England, the largest of its kind in the world.

The brewery's Gunnamatta earl grey India Pale Ale, made with Earl Grey tea, would be served in 850 pubs across England during two weeks in April.

These pubs are expected to serve about one million UK beer fans, giving the company which launched its first beer in 2008 its widest European exposure to date.

They're going to be brewing up some Gunnamatta, an Earl Grey IPA, for the festival. I hope they bring some Rex Attitude for the Scots as well.

And now they're looking at investing in some physical plant.

Yeastie Boys was expanding its productions at the three New Zealand sites it brews at, particularly in Invercargill.

"We brew just under 100,000 litres through them a year, we're looking to close to double that this year."

But McKinlay, who works three days a week at Z Energy to help pay the "family bills" for his wife and three boys, said Yeastie Boys would now also look at establishing a physical venue, most likely in Wellington.

"We've always been a really virtual company; we do all the brewing at other people's breweries.

"Now we're looking at a venue, whether it's a brew pub or some sort of warehousing facility where we actually have ‘fill your own taps' or something like that."

I didn't know that Yeastie Boys wasn't yet Stu's full time job. Amazing that he's been able to pull all this off on 4 days-a-week plus evenings.

All of this is possible because New Zealand has sane regulations around brewing and distilling. So long as you pay your excise, it's not that hard to get going. Because the regs don't make it too hard to start up, a thick market developed on the producer side making it easier for other guys to start up - sharing expertise and leasing kit.

And all of it means that I get excellent local beer. With easy entry, you have to do a bit of sifting to find the good stuff. But that's fun too.

Love letters

In today's NZMJ:

Marketing and supplying alcohol to young people

The posting of a video of an extremely intoxicated 9-year-old boy resulted in a media furore in recent weeks reflecting the extreme youth of the individual and a heightened focus on Internet postings; it also illustrated increased public concern over alcohol related harm and highlighted some key public health issues which require urgent action.

This case is a ‘tip of the iceberg’ illustration of what our survey data suggests is happening in New Zealand among young people (although data does not cover children as young as 9 years). As controls on sale from licensed premises have become better enforced and compliance has increased—only 9% of 16-year-old drinkers and 14% of drinkers aged 17 purchasing their own alcohol in 2012 (unpublished data, HRC funded Alcohol Policy in New Zealand [APINZ] survey)—social supply has become a major source of alcohol for those under the minimum purchase age. Much supply is from older friends or relatives and, on average, about 11 cans of ready-to-drinks (RTDs) or equivalent are supplied.1

The Sale and Supply of Alcohol Act 2012 introduced greater clarity to the law regarding supplying alcohol to minors. The Act now makes it an offence to supply without ‘express consent’ of the parent or guardian. Charges have been laid against three people in connection with this case providing an opportunity to capitalise on a public health message about the law and the likelihood of prosecution.

The supply of 8 cans of Cody RTDs and 2 shots (about 150 ml of absolute alcohol in total) illustrates the importance of RTDs. In a recent study RTDs were found to be the beverage young suppliers reported supplying most often to those under the minimum purchase age.1

Attempts overseas to introduce specific taxes on RTDs have not been successful because of substitution to alternative beverages2 or amelioration of costs by provision of multipack options3 but evidence shows affordability of alcohol is very important4 and the cost entailed in this supply (about $20.60) was obviously not sufficient to deter the generous spirit of the suppliers.

Increasing excise tax by 50% as recommended by the Law Commission in 2010, but rejected by government, would have increased the cost by only about $3 but would have been a move in the right direction. The results from the APINZ survey show heavier drinkers purchase cheaper alcohol.5 Tax increases are effective to reduce alcohol-related harm and significant tax increases, as have been applied to cigarettes in New Zealand, are urgently needed.

Equally urgent is action to reduce the exposure of young people to the marketing of all alcohol beverages including RTDs. Cody, with the third largest share of the high potency RTD market in NZ, carried out a significant television campaign in 20126 and is prominent in the bottle store displays to which children are exposed.

Then there is the question of distribution: high potency RTDs were to be subject, in the new Act, to greater controls. The original recommendation from the Minister, following the Law Commission review, was to prohibit RTDs above 5% alcohol potency.7 This was reduced to prohibiting sale from off licenses of 6% RTDs while still allowing sale from on-license premises.8 However, after government consulted the producers of RTDs these clauses were withdrawn with a promise the industry would adopt a voluntary code and government would regulate quickly if needed. It is not clear what would trigger regulation or if an organisation independent of the industry will monitor.

Which brings me to a final relevant issue in the media coverage of this story: while there were no comments from the vested interest groups, producers or retailers, one NZ Herald story did quote Dr Eric Crampton, a University of Canterbury economist, who said the video was shocking because ‘rare and sad events are shocking’. He also said ‘while several prominent anti-alcohol commentators have used this tragic case to argue for higher alcohol prices and broader restrictions on where alcohol can be sold, the overall statistics on youth drinking suggest that things are improving’.

Dr Crampton was referring a decrease in the proportion of young drinkers classified as hazardous drinkers or binge drinkers in recent surveys. The Ministry of Health (MoH) NZ Health Survey for example, reported 1 in 5 of those aged 15–17 years were hazardous drinkers (down from about 1 in 4 in 2006/7). There is no doubt there is some improvement but whether enough to argue against improved alcohol control policies is another question.

The University press release and NZ Herald story did not contextualise this ‘expert’ opinion, but in a recent news item it was announced that Dr Crampton and the University of Canterbury had accepted 3 years of funding from the Brewers Association of New Zealand.

In the words of the Director of External Relations of the Brewers Association, Jenny Cameron: “This funding ... will add to the voices in the public debate over alcohol and alcohol policy.”9

Sally Casswell

Director
SHORE and Whariki Research Centre
School of Public Health, Massey University
Auckland, New Zealand

References:

1. SHORE and Whariki. Social Supply of Alcohol to Young People in Taranaki and Mangere. Auckland: Shore and Whariki Research Centre, School of Public Health, Massey University, 2012, December.
2. Müller S, Piontek D, Pabst A, et al. Changes in alcohol consumption and beverage preference among adolescents after the introduction of the alcopops tax in Germany. Addiction. 2010;105(7):1205–13.
3. Jones S, Barrie L. RTDs in Australia: Expensive designer drinks or cheap rocket fuel? Drug Alcohol Rev. 2011;30(1):4–11.
4. Wall M, Casswell S. Affordability of alcohol as a key driver of alcohol demand in New Zealand: a cointegration analysis. Addiction. 2013;8(1):72–9.
5. Wall M, Casswell S, Huckle M, Yeh L-C. Effects of increases in alcohol excise tax: modelling based on results from the IAC survey in New Zealand. Alcohol Clin Exp Res. 2013;submitted.
6. Euromonitor. Rtds/High-Strength Premixes in New Zealand, 2012. http://www.euromonitor.com/rtds-high-strength-premixes-in-new-zealand/report
7. Office of the Minister of Justice. Alcohol Law Reform. 2010. Accessed 20 January, 2014. Available at: http://www.justice.govt.nz/policy/sale-and-supply-of-alcohol/regulation-of-alcohol/alcohol-law-reform-cabinet-paper-final.pdf
8. Ministry of Justice. Regulatory Impact Statement: Alcohol Reform Bill – Policy Amendments for inclusion in the Government Supplementary Order Paper. 2012, 6 September. Accessed Available at: http://www.justice.govt.nz/policy/sale-and-supply-of-alcohol/regulation-of-alcohol/Final%20RIS%20-%20Alcohol%20Reform%20Bill%20-%20Policy%20Amendments%20for%20Inclusion%20in%20the%20Government%20Supplementary%20Order%20Paper.pdf
9. Brewer's Association. Brewers Association to fund Alcohol Policy Research. Scoop; 2013, 6 December. Accessed 20 January, 2014. Available at: http://www.scoop.co.nz/stories/SC1312/S00025/brewers-association-to-fund-alcohol-policy-research.htm

I've just sent this letter to the NZMJ. Perhaps they'll publish it. Their standards on letters seems pretty low. [Update 14 February: it's published here.]

Dear NZMJ,

I note with interest Sally Casswell’s letter in the most recent NZMJ.[1] She writes:

“Which brings me to a final relevant issue in the media coverage of this story: while there were no comments from the vested interest groups, producers or retailers, one NZ Herald story did quote Dr Eric Crampton, a University of Canterbury economist, who said the video was shocking because ‘rare and sad events are shocking’. He also said ‘while several prominent anti-alcohol commentators have used this tragic case to argue for higher alcohol prices and broader restrictions on where alcohol can be sold, the overall statistics on youth drinking suggest that things are improving’.

Dr Crampton was referring a decrease in the proportion of young drinkers classified as hazardous drinkers or binge drinkers in recent surveys. The Ministry of Health (MoH) NZ Health Survey for example, reported 1 in 5 of those aged 15–17 years were hazardous drinkers (down from about 1 in 4 in 2006/7). There is no doubt there is some improvement but whether enough to argue against improved alcohol control policies is another question.

The University press release and NZ Herald story did not contextualise this ‘expert’ opinion, but in a recent news item it was announced that Dr Crampton and the University of Canterbury had accepted 3 years of funding from the Brewers Association of New Zealand.”

Here’s some context, if your readers would be interested.

The University of Canterbury’s media person contacted me requesting a press release on this issue. I was not inclined to comment on the case, knowing nothing of the circumstances of the 9-year-old in the video. But I was then disappointed to hear repeated instances of anti-alcohol commenters suggesting that this case served as exemplar of a worsening trend in youth drinking. I consequently wrote a release focusing on results from the most recent Ministry of Health and Auckland Youth ’12 data that show that youth drinking has been decreasing. I also insisted that the last line of the press release note what might be perceived as a conflict of interest. It reads, “Dr Crampton is a senior lecturer in economics at UC. He also advises the Brewers Association of Australia and New Zealand on alcohol economics and policy.”[2] I forwarded a copy of the release to the Brewers Association as a courtesy; it was the first time that I had talked with them about the matters discussed in the release. They did not request or initiate the release.

It is strictly incorrect for Casswell to insinuate that I was hiding any potential conflicts; they’re noted in the press release. My full disclosure statement has been up on my blog, Offsetting Behaviour[3], since the University entered into this arrangement with the Brewers to facilitate my work, and were also announced in a separate press release in December. It is also incorrect to suggest that my press release pointing to the actual statistics on youth drinking were in any way motivated by this arrangement. I just get annoyed when policy activists try to mislead the public about the underlying statistics. And I continue to be amazed by those who think tax increases are the appropriate way of dealing with those adults who think it hilarious to get 9 year olds drunk.

1. Casswell, S. Marketing and supplying alcohol to young people. New Zealand Medical Journal, 2014;127(1388).
2. The full release is archived at Scoop. http://www.scoop.co.nz/stories/AK1401/S00225/video-showing-a-drunk-nine-year-old-shocking-for-good-reason.htm
3. My disclosures statement is here: http://offsettingbehaviour.blogspot.com/2013/12/alcohol-work.html

Illegal literature

If Board of Review Chair Don Mathieson had had his way, Into The River would have been R18. It would then be illegal for anyone, whether parent, guardian, or teacher, to provide it to someone under the age of 18. Your smiling censor is pictured below, receiving the ONZM in 2012.

Is Into The River on the syllabus for any Intro to NZ Literature courses at New Zealand universities?

If it is, and if Mathieson had had his way, lecturers in those intro courses would have had to have pulled the book from the syllabus. It's not uncommon to find 17 year olds in first year courses. If any 17 year olds were in the course, you couldn't assign anything about the book without requiring somebody commit an illegal act. Sure, this stuff is rarely enforced, and it's hard to imagine a prosecution for a university library or bookstore giving a copy of an assigned text to a student. But completing the course requirements would require that someone commit an illegal act.

How did we wind up in a situation where either the OFL or its review board can make it illegal for a 17 year old to be given a book that is legal for adults to possess, regardless of whether the book is supplied by a parent, guardian, or teacher?

The original OFL review was really rather reasonable. They wrote: (HT: Edgeler)

There are many other novels widely available without restriction in New Zealand with similar sexual descriptions of an equivalent nature, many of them literary classics and coming of age novels, or popular fiction phenomena in their own right. This would make a restriction on Into The River arbitrary and unfair. It would create a widespread inconsistency in conditions of access to books of this nature.

I wonder what would happen if OFL were asked to review a couple hundred books meeting this description, with all of their reasonable decisions appealed to Mathieson's board. Would the stink get so great that somebody decides to fix the system? Or would we just be stuck with a stinkier system?

Might it possibly make sense that we have someone with less than a half-century between himself and the targets of his regulation heading up this kind of review board?

Mathieson also is the editor of a book on applying Christianity in the workplace. I wonder what his review board would say about selected bible chapters.

"An endgame to Sugar-Sweetened Beverages in NZ by 2025?"

Oh, the things that the Health Research Council helps support. [See update, below: support seems not to be financial.] See substantial update on HRC below.

Via Dave Guerin, I find that Auckland Uni is hosting a symposium: "Sugary Drink Free Pacific By 2030?" The press release notes Richard Johnson and Robert Lustig as keynotes. Lustig is famous for his "fructose is toxic" position; Johnson's pretty similar.

The first day's sessions will discuss just how evil sugar is. The second day's sessions will cover policies to reduce sugar, including a keynote from a guy who's eating a lot of sugar and making a movie about it, a talk by Tony Falkenstein advocating a soda tax, a talk on lessons for advocacy, and one called "An endgame to SSB [sugar-sweetened beverages] in NZ by 2025?"

Tony Falkenstein is likely the same Tony Falkenstein whose day job is putting water coolers and filters in NZ offices: they're called "Just Water". I doubt he has any particular expertise in soda taxes, other than that they hit competitor beverages. He's also the one helping organise some class action suit against Coke and the beverage companies. I'd thought that part of the deal with the Accident Compensation Commission was that New Zealand didn't really have class action liability suits; I expect that it's largely a publicity stunt for Falkenstein's water company. I think we had one of his water coolers before we moved offices; I think I can see a budget line item that the Department can pretty quickly do away with as part of our ongoing budget cuts.

Now down at the bottom of this fantabulous shindig's programme is an HRC logo. It's also on the Symposium's flyer advertising their keynotes. I wonder how much HRC is paying to help sponsor this event. Registration is $100 and they're flying in two keynotes from the US; there's no way they're covering their costs based on registration fees.

[Update: HRC's Chair, in comments below, confirms that HRC is not providing financial support for the conference. It mirrors the conference materials on its website, its branding is on the conference collateral materials, and it advertises the conference on its website, but that should not be mistaken for HRC support of the event. The paragraph below consequently is struck. Note further that while HRC reports to the Minster of Health and while its Board is appointed by the Minister of Health, it is not part of MoH.]

Update 2: The Taxpayers' Federation reports (18 February) that FIZZ has used HRC's logo without HRC's permission and that HRC is seeking that the logo be removed.

I also wonder why the National government allows its Ministry of Health to fund issue advocacy events like this. Weren't they supposed to be stomping on this kind of thing?

Add to the slippery slopes file. A couple years ago it was SmokeFreeNZ 2025. Now MoH seems to be putting money into a conference pushing an end to soft drinks by 2025. Now it's moving towards ending sugar-based soft drinks. I wonder how long until they want plain packaging for Coke.

Making an ass of the law

From the Classification Office's Board of Review's* recent decision regarding "Into the River", a teen-lit book.* Not just any teen-lit book - the one that won last year's New Zealand Post Margaret Mahy Book of the Year prize and topped the Young Adult Fiction category.

The book's plot:

The novel is centred on Te Arepa Santos, a boy from a fictional village on the East Coast of the North Island in New Zealand/Aotearoa. He wins a scholarship to a boys’ boarding school in Auckland, and the transition is difficult. He forges friendships, finds enemies, and discovers that his Maori identity is discounted and a disadvantage. He endures the bullying that comes from this, as well as that meted out to new boys, and sees what happens when that bullying goes too far. There are confusing encounters with sex and a growing understanding of intimacy, the use of drugs, peer pressure, deep racism, grief and death.

Decision summary

The Film and Literature Board of Review noted in its decision that the book contains themes of bullying, underage casual and unsafe sex, drug taking and other matters that people may find offensive and upsetting. The Board considered that the book is likely to educate and inform young adults about the potentially negative consequences that can follow from involvement in casual sex, underage drinking, drug taking, crime, violence and bullying. The Board also considered that the book serves a useful social purpose in raising these issues for thought and debate and creating a context which may help young adults think more deeply about the immediate and long term consequences of choices they may be called upon to make.

However, there are scenes in the book that are powerful and disturbing, and in the opinion of the Board run a real risk of shocking and disturbing young readers. Whilst those aged 14 and above are likely to have a level of maturity that enables them to deal with this, those below the age of 14 may not. The Film and Literature Board of Review classified the book as objectionable except if the publication is restricted to persons who have attained the age of 14 years. The Board also requires that any further publications of the book carry the same descriptive note as the present publication, reading "parental advisory explicit content".

What does this decision mean?

The Board of Review decision replaces the one by the Classification Office. It is illegal for anyone, including parents and guardians, to supply Into the River to anyone under the age of 14. [emphasis added]

I can understand rules barring sale of potentially disturbing books to youths. I wouldn't necessarily support those rules - it would depend on the book - but I could understand them. Barring parents, who know more about their children than the New Zealand Censor ever will, from giving a book to their child? I'm having a much harder time than usual in avoiding expletives in this post. I usually only have to delete two or three. This time, well, it was more. Our insane classification system has made it illegal for a parent to provide to his 13 year old the book that won "Best Young Adult Fiction" prize last year. Sure, the judges at the prize competition noted that the book was aimed at kids aged fifteen and up. But kids vary considerably in maturity - this totally has to be a parent's call.

I doubt that any parent has ever been prosecuted under this provision. But it's laws like this, that make criminals of all of us, that make an ass of the law.

How much of an ass? Here we go. Let's start with age-restricted film categories. RP means that you can only watch with a parent or guardian if you're under the stated age. We'll leave those to one side. All those decisions were just "Hey, we think that kids under this age shouldn't be watching this stuff, but it's up to you as parents", and that's totally cool. And I could even imagine it being helpful. But let's look at only the ones where it is illegal for a parent to give the kid a copy of the BluRay and watch it with him, if the child is below the stated age.

Illegal to supply to your child if your child is under the age of 13:

• Various discs from various seasons of:
• South Park
• Heroes
• 24
• The Vampire Diaries
• House
• Bones
• WWE Wrestlemania
• VEEP
• Breaking Bad
• The Bible

Illegal to supply to your child if your child is under the age of 16:

• Various discs of various seasons of the blu-ray editions of:
• Entourage
• South Park 13th season: 
• Season 12 Disc 3 was ok for 14 year olds: it is R13. So if you have ALL the South Parks, you need to check EACH DISC OF EACH SEASON to make sure that you're not being illegal by lending a disc to your 14 year old. Some are OK, some aren't. BUT THEY ALL AIR UNEDITED ON FREEVIEW. 
• Same problem with Heroes. Season 3, Disc 4 is R13. Season 3, Discs 1, 3, and 5 are R16. 
• Fringe
• Game of Thrones
• Always Sunny in Philadelphia
• Breaking Bad
• Hot Tub Time Machine (Extended version)
• Bruno
• Slumdog Millionaire (!?!!?)
• The Shining
• Hansel & Gretel, Witch Hunters

These ones are illegal to supply to your child if your child is under the age of 18:

• Various discs of various seasons of:
• American Horror Story: Asylum
• Boardwalk Empire
• Weeds
• Walking Dead
• Game of Thrones
• Breaking Bad
• True Blood
• The Replacement Killers
• Payback

All of these have the red Restricted labels:

Red means restricted
R(age): It is illegal to sell, hire, show or give a film or game with an age restricted label to anyone under the age specified. If something has one of these labels it can only be supplied to people of and over the age shown on the label. A parent, shop or cinema is breaking the law if they supply an age-restricted item to someone who is not legally allowed to access it. You will see these labels on films, games, DVDs and a few music recordings, magazines and books.

Fortunately, fewer books hit the Restricted ratings, likely because the Classification Office rates books only really when people send them books to be rated.

Currently restricted books include:

• 100 Most Infamous Criminals (R13) 
• Into The River (R14) 
• Mytho-poeikon (R16)
• GoodReads review here including folks saying things like "appeal to all age groups" and "loved this book in my early teens" and "I was fascinated with this book as a child")
• The Big Book of Urban Legends (R16)
• de Sade's One Hundred and Twenty Days of Sodom (R18)
• The Long Hard Road Out of Hell (R18, Marilyn Manson's autobiography). 

A bunch of other art books are R18, including Mapplethorpe. A bunch of books on growing opium and marijuana are also R18.

And there are a pile of other books that aren't kiddie porn that are, nevertheless, illegal even for adults to possess.

I can see some point to the existence of a classification body. If we want kiddie porn to be illegal to possess, then somebody has to evaluate whether or not some photograph or video is really of a child under the age of 18. And there can be a case for standard ratings to help parents in deciding whether some film is really suitable for the whole family. But the law here is a complete ass. Any parent who screws up and watches the BluRay version of the wrong episode of South Park with their 15 year old instead of watching it on FreeView is subject to a fine of up to $10,000 or up to three months in prison (see section 126). And if your kid's doing a school project on drugs and you give him a copy of the wrong book on how to grow marijuana: up to 10 years in jail.

Some Kiwi criminals listed below. Somebody please protect me from them.

@toryhipster @louise_bee turns out we are criminals: some De Sade books are objectionable. We bought them on Amazon.
— Jeffrey Simpson (@DoctorJeph) January 21, 2014

@DoctorJeph @louise_bee lol I watched banned movies, I'm obviously not to be trusted
— Bonnie Hartfield (@toryhipster) January 21, 2014

* Update: to be clear, the Classification Office listed the book as M; the obnoxious decision below is from the Board of Review.

Classification Costs Revisited [and updated]

Another potential reason that Kiwis have to access Netflix by pretending to be American: classification costs.

Any film distributed to the public in New Zealand must carry a label from the New Zealand Office of Film & Literature Classification. There is no exemption for films or games.

Suppose that Netflix wanted to open an official NetflixNZ and had somehow sorted out all the rights issues with all the rights holders.

Next step is to check its film catalogue against the NZ classifications database. For any films already classified in New Zealand, they'd need to attach the NZ classification sticker somewhere to the start of the programme, or maybe in the programme description.

Digital labels for online content can be obtained from the Film and Video Labelling Body. You can call the Labelling Body on +64 09 361 3882, or email them at enquiries@fvlb.org.nz.

What if a downloadable film or game is supplied from an offshore server?

While distributors may be supplying games and films from servers not based in New Zealand to New Zealand-based customers, the supply activity falls under the jurisdiction of the Films, Videos, and Publications Classification Act 1993. Restricted games and all films that are not exempt from the labelling requirements should be classified and labelled for supply to the New Zealand public regardless of the source of supply or the platform used to download the material.

Anything not already classified for distribution in New Zealand would need to be classified. 

If the film already has a UK or Australian unrestricted rating (G, PG, or M in Oz, U, PG, 12 or 12A for the UK), they'll issue the NZ equivalent (G, PG, or M). I do not believe classification fees apply in this case.

If the film has a UK or Oz restricted rating (MA15+, R18+ in Oz, for example), the Classification Office will review the film itself; the fees below then apply.

Classifying a DVD cost $1000 as of a couple of years ago; it's $1124.40 now. You have to fill in forms for each film and wait until it's reviewed; a 50% surcharge for urgent consideration can cut down delays. Some films are exempt from classification requirements; somebody at Netflix would need to read the legislation and decide whether particular films met the requirements.

Here's the flow chart for each film Netflix, or anybody else, would want to stream in New Zealand.

Netflix has on the order of 3000 streaming movie titles. They also have on the order of 20,000 streaming TV episodes. How many of the movie titles have already been rated in New Zealand? I don't know. Here are some of their recently rated films.

TV shows come under the Broadcast Standards Authority. They have their own classification systems for Free-to-Air and Pay TV; the same show will get a different classification on Free-to-Air than it would get on Pay TV. A watermark with the classification comes at the start of a show on television.

Would a streaming-only service providing access to TV shows that hadn't before aired in New Zealand come under the Broadcast Standards Authority's Pay TV Code or the Office of Film Classification's DVD rules? The Pay TV Code requires visual warning labels immediately prior to content, so Netflix would need to add watermarks. But, DVD box sets get OFC classification categories. I don't know whether Netflix-streamed TV series would come under the OFC's rules or the BSA's PayTV Code. I think that the latter would have Netflix supply its own ratings, but would allow NZ-based viewers to complain to the BSA were any of the codes out of line with community expectations.

I would be surprised if classification costs were the main hassle stopping Netflix from officially taking Kiwi subscribers; rights issues seem even worse. But wouldn't it be reasonable for us to start simply accepting any UK, US, Canadian or Australian film classification as good enough for New Zealand purposes?

Update: Broadcasts come under the BSA; everything else seems to be OFLC. Broadcasting means "any transmission of programmes, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus but does not include any such transmission of programmes:
(a) made on the demand of a particular person for reception only by that person"
I read this as saying that on-demand streaming isn't broadcasting.
Section 122 here says that distribution of restricted or objectionable publication includes transmission other than broadcasting. Section 125 makes it a strict liability offence to supply or distribute a restricted publication other than in accordance with New Zealand's classification regs. I expect that means Netflix would have hassles here, but I'm no lawyer.