Afternoon roundup

 The afternoon's closing of the browser tabs brings the following worthies:

• Superb news! The police have taken an operational decision not to waste resource sending helicopters out looking for cannabis plants. Or at least National Headquarters isn't going to resource it any longer. Lots of things are illegal; police (rightly) have limited budgets and so have to make decisions about where to focus their efforts. Flying around in helicopters on gardening operations makes far less sense than putting resource into preventing crimes that actually have victims. 


• Audrey Young on the slow pace of getting the vaccine out.


• In any other circumstance, I'd be a bit nervous about Otago Public Health recommendations around smoking policy. But I'm in complete agreement with Baker/Wilson on this one. Shared spaces in MIQ seem crazy risky, and especially so with more contagious forms of the virus coming through. I'm also with them, sadly, on the desirability of reducing intake from risky places - at least until we can get to far more frequent testing of everyone in the border system. It totally can be done. Daily testing of all border staff, through daily saliva-based PCR tests, would mean any infection of MIQ staff would be almost certainly caught before it could turn into community spread. Oh, and Michael Baker also wants rapid testing at the airport pre-departure. It's been feasible for a long time. We could still do it. The Abbot rapid antigen tests are cheap and could be rolled out for use at the departure gate. The government could buy thousands of them, send them out with every outbound flight so that they can be used at the gate pre-departure at every gate departing to New Zealand. Or pick a different test if Baker prefers a different one. At least now that Labour has signaled support for pre-departure testing, folks can talk about it without being attacked by a pile of Labour twitter partisans. 


• Luke Malpass thinks we can still be aiming for a broader travel bubble, and has this encouraging news about Auckland airport.

  Once the Australian bubble is opened, it is understood that the international terminal will basically become green lane only, while “red lane” flights will land at a separate building and passengers will be bussed to be processed for quarantine, or to a separate area if transferring to another flight. The airport will need two weeks’ notice to get this working.
  
  The other big issue, which Covid-19 Response Minister Chris Hipkins has repeatedly raised in public, is how to manage repatriation of both New Zealanders and Australians in the case of a big lockdown. Here, Australia’s federal system should make things easier.
  
  Should there be an outbreak in a certain part of Australia, say Queensland, the other states would likely close their borders to Queensland. Meanwhile, the bubble could continue in the other states. In addition to this, one option being batted about is getting travellers to Australia to sign a form on departure acknowledging that, in the event of an outbreak, they may have to hunker down where they are for 14 days, should exit flights not be able to be arranged. Vice versa for Australians on these shores. 

  All of this has been entirely obvious as the way forward, for months. Government moves slow.


• This is fun. SocialBubble provides you with typical twitter feeds as seen by people of various ideological persuasions. You can look at Twitter as though you were a socialist, leftist, progressive, liberal, centrist, moderate, conservative, right-winger, or alt-right person. FWIW, my twitter feed looks closest to the one they identify as centrist. Or at least I recognise the folks in that feed, and a lot of them are the ones I also follow: Neoliberal, Noah Smith, Conrad Hackett, for example. I recognise a lot of the feeds in Socialist too, like Sanders and Jacobin and Existential Comics, but choose not to follow them. I had followed Existential Comics because the comics are often superb, but the twitter feed is just too tedious. 


• Eden Park will be allowed to operate as a stadium. This is good, not least because it reduces the prospects of anybody throwing money at a new downtown waterfront stadium. 


• Tyler Cowen asks that you start from your estimates of labour demand elasticities and be consistent about things.

JEEM

Getting to Browser Tab Zero so I can reboot the computer is awfully hard when the one open tab is a Table of Contents for the Journal of Environmental Economics and Management, and every issue has more stuff I want to read.

A few highlights:

• Gugler et al demonstrating the effectiveness of British carbon pricing over German regulatory interventions in the electricity market. Carbon prices were far more effective in getting to a cleaner power grid. 
• Steven Smith on prior appropriation versus proportional division in allocating water rights, leveraging a neat natural experiment (the formation of Colorado forcing a change in water rights). They suggest proportional rights (think: NZ's way of divvying up fishing rights within a total allowable catch) can get you to higher yields and higher-valued crops; water markets can work around inefficient allocations in either property rights system; but, that transactions costs hinder water trading. 
• Banerjee et al showing that exporting firms in Indonesia do more to abate pollution than non-exporting firms.
• A cost-benefit assessment of cost-benefit assessment! Newbold et al find that the value of information provided by water quality valuation will almost certainly exceed the cost of the study. 
• Manning et al suggest that water rights retirement may not always be worth the cost.
• More evidence for the merits of tax over command-and-control regulation: Lade et al have a look at flaring regulations in the Bakken fracking fields in North Dakota. The regulations reduced flaring. But Lade concludes "taxing flared gas at the existing public lands royalty rate would achieve 99% of the flaring reductions at 46% lower cost."
• Did moving away from Canada make me smarter? Cook et al find that people do worse in testing when it's cold outside, despite the indoor testing environment being entirely climate controlled. 
• Edenhofer et al on stranded assets and climate policy. Bottom line: you want policy to provide a lot of certainty about the future path. They warn stranded assets are most likely to lead to welfare losses if: "(i) policy is a stochastic process, (ii) government policies are subject to rent-seeking, (iii) governments cannot commit to future policy paths or (iv) asset losses hit poorer individuals." One upshot for NZ: sticking with the ETS with a binding published declining path solves (i-iii), and providing a carbon dividend mitigate (iv). 

Vaccines are cheap

Israel chose to pay a bit over the odds for the Pfizer vaccine to get earlier access. 

Here's The Times of Israel from 16 November.

American government will be charged $39 for each two-shot dose, and the European bloc even less, but Jerusalem said to agree to pay $56.

Israel has now vaccinated more than 80% of their elderly population and is getting the second doses into arms. 

I do not know what New Zealand is paying. But suppose we're paying the same as the US. For only $85 million USD more, or just under $120m NZD more, we might have also had early access. 

$120m sounds like a lot in normal times. But if it meant that we could have everyone vaccinated from mid-year, instead of starting to roll-out vaccination from mid-year, we'd be able to open the border, right? Surely being able to open the border half a year earlier is worth at least $120 million. Like, if someone had offered the government a quarter of a billion to close the border for half a year, no sane government would have taken that offer.

I've heard a lot of rationalisations on this one. Some would argue that we'd have bid it away from places that needed it more. But done properly, through advance market commitment orders, it would also have helped to fund the capacity building that allows more production for everyone. 

Ex ante, it would be impossible to know which vaccine would be best. We'd have had to have paid above the odds for each of several vaccines. But even that is still incredibly cheap as compared to having to keep the border closed for longer than necessary. Even if it added half a billion all-up to the cost of vaccination, the costs of lockdowns are in the billions and so too are the costs of a closed border. If MIQ is about $6k per stay and handles 10k returning Kiwis a month, then that all by itself is $60m a month. Vaccines are cheap, even paying well over the odds. 

Meanwhile, the new online vaccination register is still under development.

Aristocracy of Pull continues

RNZ reports on continued arbitrariness on decisions at the border. 

British comedian Russell Howard is about to tour New Zealand and other acts allowed in through managed isolation this summer include drag queen RuPaul and musicians at Northern Bass in Mangawhai and the Bay Dreams festival.

The vice-president of the Promoters Association, Gray Bartlett, said despite being an approved promoter with Immigration New Zealand, he was offered no explanation on why acts such as the Music of Cream and American speaker Michael Franzese were turned down.

No-one had spelt out what the criteria were for approval nor who was making the decisions.

"What I really don't like is where governments begin to start with favouritism and choosing who they like, or getting people to choose who they like to come in. That's not right. And and it can be done quite easily in our business because they can formulate reasons why someone may be important to have here. But in reality, it doesn't stand the sniff test, I'm afraid. And we can prove that with some of our applications."

One project he was involved with would be employing about a 100 local workers if their application was approved, but he said he did not want to put that at risk by talking about it.

"I don't want to affect the lives of these Oscar winners and Grammy winners who want to come out here in a month or so's time to give great enhancement to New Zealand as a country, but it's all a game a favourites, it's who you know in government, and this particular government is particularly poor at this particular task."

It is an impossible task. Nobody in government can really know what is the most highly valued use for the small number of MIQ spaces held for non-residents' entry. Is is an entertainer, or an engineer? If it's an entertainer, which one? How can they decide?

An Immigration New Zealand spokesperson said all requests for a border exception for individuals in the arts and entertainment industry are assessed against the same 'other critical worker' criteria as any other request for a worker as set out in immigration instructions.

The criteria is based on whether the skills or experience the person has are readily obtainable in New Zealand or whether the worker is undertaking a time-critical role in specific areas, they said.

"INZ can confirm that since 18 June 2020, 66 requests have been received relating to the arts and entertainment industry, which includes all artists and festival performers but excludes film and television. Of those, 39 requests have been approved, 23 requests have been declined, and 4 requests are still being assessed.

"In regards to the request relating to Music of Cream, based on the information provided INZ was not satisfied that the performers met the criteria, particularly in regards to demonstrating that the role was time-critical to work which would bring significant benefit to the national or regional economy as there was limited information provided to demonstrate what the economic benefit would be. INZ has engaged with Mr Bartlett to advise him of his options following the decline in August, however INZ is yet to receive any new information or a request for reconsideration. Should Mr Bartlett request a reconsideration or make a new request, INZ would consider this."

It would be surprising to me if a Cream cover band were the highest valued use of MIQ spaces, but how would I know? How would INZ know? 

The government runs essential workers spaces generally on something like cost-recovery. But cost-recovery is nonsense in this kind of environment. The cost of the rooms isn't whatever the government is spending on them. The cost rather is the value of the room in its highest-valued use - the opportunity cost of the room. 

In normal scenarios, the numbers wind up being about the same thing. In competitive markets, the price is the cost is the opportunity cost and it all works out. MIQ rooms aren't like that. There are far fewer of them available, at the administrative charge imposed for use, than there is demand for them. 

The only way of really knowing the highest valued use for those rooms is to put them to auction - the same way that we find out who the highest valued user of a house is. 

In July, we'd suggested what I still think would be a far better way of allocating MIQ spaces. 

Allow MIQ facilities to charge inbound visitors directly. The government would charge the facilities for the services provided by government workers - nurses, security, and everyone else. Instead of allocating rooms to returning Kiwis free of charge, with those Kiwis then having incentive to make multiple bookings just in case, provide eligible returnees with a voucher that could be applied toward the cost of a stay in MIQ. The value of the voucher would be equivalent to the cost of a stay in a basic MIQ facility during an off-peak time. If returning Kiwis wanted to stay at a 5-star facility instead of a more basic one, they could pay the difference. And the government could impose a surcharge on stays by non-Kiwis to help fund the cost of the vouchers provided to returning Kiwis. 

What's changed since July? The virus has become far more contagious. The epidemiologists at Otago, like Nick Wilson, have been recommending pushing MIQ back to the source country. They're right. Setting MIQ facilities overseas, and having visitors stay there before flying here, reduces the likelihood of cases making it here. If we do wind up with facilities set overseas, running the kind of set-up I've suggested would make it easier to allocate spaces and would help in funding the thing. Non-Kiwis coming in would wind up funding the MIQ stays of returning Kiwis. And it's easier to scale that system abroad than it is to scale it here. 

If we can ever get rapid PCR saliva tests available for MIQ staff and for returnees, ramping up to daily testing of MIQ staff and returnees could substantially reduce the risk inherent in the new variants of the virus. A more contagious variant is more likely to be transmitted to a border worker. If a border worker gets it, it's more likely to be transmitted onwards to someone in the community. Daily testing would mean that it just couldn't get very far. The test would be far more likely to catch cases before others were infected. Without either far more frequent testing of border workers, or MIQ being pushed back to the source countries, we're taking an awful lot of risk. 

Mom's Time

Dan Hamermesh always takes on the fun projects. 

A decade ago, he did a pile of work looking at returns to beauty. 

Now, he's looking at time-diary data. Here's the abstract from his latest at NBER. 

Using time-diary data from the U.S. and six wealthy European countries, I demonstrate that non-partnered mothers spend slightly less time performing childcare, but much less time in other household activities than partnered mothers. Unpartnered mothers’ total work time—paid work and household production—is slightly less than partnered women’s. In the U.S. but not elsewhere they watch more television and engage in fewer other leisure activities. These differences are independent of any differences in age, race/ethnicity, ages and numbers of children, and household incomes. Non-partnered mothers feel slightly more pressured for time and much less satisfied with their lives. Analyses using the NLSY79 show that mothers whose partners left the home in the past two years became more depressed than those whose marriages remained intact. Coupled with evidence that husbands spend substantial time in childcare and with their children, the results suggest that children of non-partnered mothers receive much less parental care—perhaps 40 percent less—than other children; and most of what they receive is from mothers who are less satisfied with their lives.

After adjustments for education, age, children's age and so on, married mothers spend about 40 minutes more per day in household production than do similar other mothers. But most of that time difference is in non-childcare activities; married mothers spend about 6% more time providing childcare. But their husbands spend a lot of time in childcare as well. Consequently:

Together with the slight amount of additional time in childcare by married women, this suggests that children of married mothers receive over 3 hours per day of care from their parents, compared to about 1-1/2 hours per day that children receive from their single mothers.

The biggest gaps are for children aged 3 to 12; 

Widows differ substantially from other groups of mothers without a spouse in the home:

One sub-group of non-married mothers uses time differently from the others—widows. They account for only four percent of non-married mothers ages 25-54 in the sample, but they show statistically significant differences in the time they spend on various activities compared to other non-married mothers. They exhibit much more home production time than others; indeed, they differ only minutely (five minutes less per day) in this dimension from married mothers. They make up for this extra time by working and sleeping less than the other non-married mothers. Overall, except in their leisure time widows behave more like women with a husband present than do divorcees, separated mothers or those whose spouse is absent.

And marital status has substantial effects on self-reported life satisfaction:

The estimates of the impact of marital status in regressions describing this indicator of life satisfaction are shown in the bottom panel of Table 7. For all four countries the same vectors of covariates that have been used throughout are included. If there is no spouse/partner in the household, the mother is significantly less satisfied with her life—by 16, 43, 23 and 16 percentage points in the U.S., France, U.K. and Italy respectively. There is a very large difference in this measure by partnership status in all four countries. (The effects of being non-partnered are even more significant statistically in ordered probits describing the entire range of responses to the questions about life satisfaction.22) While feeling only slightly more rushed for time than partnered mothers, non-partnered mothers are much less likely to be satisfied with their lives. This difference is essentially unrelated to how they allocate their time across different activities—the results hardly change if the mother’s time allocation is included in the estimating equations.

Note that while the Table 7 estimates adjust for the effects of education (among other covariates), income doesn't seem to be included.  

Hamermesh concludes:

The results suggest that children of non-partnered mothers not only receive less parental time than others. The attention that they do obtain is from mothers who feel more stressed for time and who are less satisfied with their lives, a concatenation of time and possible interest that may on average disadvantage their children even more. Overall, our findings imply the need for even more attention and concern to the difficulties facing children in single-parent households. With non-married mothers in the U.S. being disproportionately less-educated and more likely to be from minority groups than married mothers, this conclusion takes on special importance.

Hamermesh doesn't draw policy conclusions; I expect folks will form them based on their prior preferences. 

Some conservatives may take it as an argument for strengthening families, discouraging out-of-wedlock births, and encouraging marriage counselling over rapid divorce. 

Others might take it as argument for very substantial investments either at school or before school to try to make up for the hour-and-a-half difference in parental time per day. There will be a substantial cumulative difference by the time a child enters school. 

It may not be particularly controversial to suggest that the government's proposed Equity Index, which would replace school decile funding formulas, include marital status as one of the variables. I don't think it's currently in there.

Cleansing the Twitters

I'm less than convinced by arguments that platforms like Twitter should be subject to common carrier regulation preventing them from being able to decide who to keep on as clients of their free services, and who they would not like to serve. It's much easier to create competition for the network in this case than it was for Telecom in the 1950s.

There has been some concern about the coordinated action by a lot of platforms against a set of conservative platform users in the US. It has been taken as suggesting some leftist conspiracy against right-wing views. 

There are, of course, multiple hypotheses consistent with the available data.

Here are some of them, with some very thumb-suck probabilities.

1. The terms of service always barred what Trump et al have been up to. But the platforms have been cowed by fear of sanction by Trump’s executive branch, until the combination of Trump supporting and encouraging insurrection AND Trump’s having little time to retaliate against them meant they could finally enforce said terms of service. But this hypothesis doesn’t explain coordinated action across platforms where Trump and his people weren’t as active. (1 chance in 8)


2. Intelligence agencies warned the combination of platforms that Trump’s people (Q crazies, Covid-crazies, etc) were using the platforms to coordinate insurrection, and that Trump’s tweets would easily help coordinate those. The platforms listened and blocked out of fear of criminal liability for supporting terrorism. (1 chance in 8)


3. As above, but not out of fear of liability. Instead, out of existential worry. If America goes full-despot, the platforms can no longer exist. Barring crazy people from the platforms to prevent that reduces that risk. Both 2 & 3 explain coordinated action. (1 chance in 10)


4. They’re pandering to an incoming Democratic administration with a tipped Senate, in hopes of more sympathetic regulatory treatment. The GOP losing in Georgia provided the trigger that coordinated action across platforms, not any intelligence tip-offs. (1 chance in 8)


5. They were always a bunch of commies just looking for an opportunity to knock out conservatives; the timing follows from (1) but the ToS bit is just an excuse. (1 chance in 40)


6. Other explanations (1 chance in 2) 

What's your preferred hypothesis? Have I missed any obvious ones?

New Zealand's Privacy Commissioner also, bizarrely, weighed in with his worries about the platforms being able to knock out those users without some regulatory democratic oversight. If hypothesis 1, 2, or 3 is what's going on, a Trump appointee overseeing the administrative agency regulating the platforms would not have helped. If it's 4, then that also doesn't help. Maybe it would have guarded against 5.