Herald on sugar

Kudos to Boyd Swinburn and the usual anti-sugar folks for getting this wonderful piece of advocacy published in the Herald as journalism rather than advertorial or op-ed. I'm cancelling my subscription to the Herald and asking for a refund of the balance of my annual subscription fee, but that's a bit beside the point. Swinburn et al have done a great job here with cheer-leading reporter Luke Kirkness.

Here we go.

"I've finished pulling teeth today, my right hand's actually sore I pulled out so many."

Those are the harrowing words of New Zealand dentist Dr Rob Beaglehole who is urging the Government to take action and tax sugary drinks.

The problem is so extreme more than $20 million is spent each year anaesthetising Kiwi children so they can undergo tooth removals as a consequence of consuming sugary drinks.

And today, a petition has been launched in an effort to convince the Government to introduce a tax on sugary drinks.

But the current Labour-led Government and Health Minister Dr David Clark have no plans for such a tax.

Excellent heroic-dentist versus uncaring-government framing.

"The Government needs to modify the environment that we're living in," Beaglehole, the New Zealand Dental Association (NZDA) spokesman, said.

"We've had enough of Coca-Cola, McDonald's and other junk food companies selling this sickness to our kids.

"They keep getting away with it ... we need to make the healthy choice the easy choice."

Beaglehole told the Herald last night the NZDA backed the petition but the Government should go further than just implementing a tax.

University of Auckland academic Dr Gerhard Sundborn, on behalf of The New Zealand Beverage Guidance Panel, is behind the latest petition.

Calls for a sugary drinks tax aren't new he said. One with 10,000 signatures was presented in August 2017 but largely ignored by politicians.

"It was extraordinary that this earlier call to tax sugary drinks ... was snubbed by the then Minister of Health, and by both major parties," he said.

Getting the journalist to fail to follow up with the Ministry, or to check in on whether the Ministry has done prior work on sugar taxes - again, excellent work. Those interested can read NZIER's comprehensive review of the prior five years' published literature on the topic - commissioned by the Ministry of Health. But the journalist isn't interested. At least Newshub's reporting covered that part. Like, you might think that a journalist would wonder why the Ministry has been sceptical.

"NZDA has estimated that we spend more than $20 million every year to anaesthetise children so they can undergo multiple tooth extractions as a consequence of consuming sugary drinks.

"We must find more ways to address these issues."

The Panel, made up of researchers from a range of fields including public health, medicine and marketing, suggests a targeted tax on sugar should be top-priority to tackle the country's interconnected issues with obesity, type 2 diabetes and rotten teeth.

Really? The dentists have been able to sort out what proportion of extractions are due to sugary drinks and what proportion comes down to other stuff and what comes down to a combination of factors including never brushing one's teeth? This is amazing. I'd love to see that research and see how they established it. The journalist wasn't interested, but I am.

I know I'm blockquoting the whole article here, but I don't feel too bad about it. Here's the press release from the New Zealand Beverage Guidance Panel, and much of the article is a paraphrase of it.

Who is the Guidance Council anyway? This Stuff article (no paywall, better journalism) from 2017 says it was set up by FIZZ - an anti-soda advocacy group. This isn't some neutral bunch of nutritionists - it is an anti-soda advocacy group. This brief says they were modelled on the US Beverage Guidance Panel, "The intention of the panel was to develop guidance to government and community groups to limit the intake of sugary drinks." So: Panel established to fight soda consumption argues for sugar tax.

Let's move on.

The Health Minister agrees but in a statement to the Herald he said the Government had no plans for a sugar tax, as he had "consistently said".

"We need to reduce sugar levels in our processed food and drink, and develop a better food labelling system," Clark said.

"I have met several times with the food industry and set out the clear expectation that business and the Government will work together on this issue."

In September, the Herald reported Prime Minister Jacinda Ardern was told a sugar tax would generate millions in revenue and save lives.

Ardern was briefed on a potential tax by the Ministry of Health's chief science adviser Dr John Potter at her request.

Potter said a tax of 20 per cent had been shown to work but should be based on volume or sugar content, not value of the product.

"Reduction of consumption via a tax will probably be greatest among the households with the lowest disposable income. In New Zealand, Māori and Pacific will benefit strongly," he said.

Potter did send that memo: 16 February 2018.

It was two-pages of unreferenced bullet points.

It made no mention of the comprehensive NZIER report on the effects of sugar taxes, which Potter had received on 15 August 2017 and which was publicly released, finally, after much prodding from me, on 31 January 2018: two weeks before Potter's memo.

The NZIER report was covered in the Herald on 2 February, by Newsroom on 7 February, and even in the Toronto Globe and Mail on 12 February. If Potter missed it in August, you would think that the Ministry of Health's Chief Science Advisor just might have noticed extensive media coverage of an important report in his brief during the fortnight before he provided his memo. It surely would also have come up in discussions within the Ministry between April and February.

Potter's failure to mention it, and providing advice concluding the opposite of the Ministry's comprehensive commissioned report, could reasonably be characterised as Potter, the Chief Science Advisor in Health, having misled the Prime Minister.

See, if you expect reporters to either know their beat or to ask people who do know the area, you'll be a bit disappointed in the Herald article by now. It would not have been hard to get NZIER's Peter Wilson on the phone.

And you'd be wondering just why you're paying $200/year as a subscription fee, and whether they'll refund the balance of the subscription like you've requested.

I'll stop there. The piece goes on, and does have a quote from the beverage industry saying that the beverage industry doesn't like sugar taxes. And it concludes with a link to Sundborn's petition - despite (I'd thought!) standard drill at Herald being that they don't outlink.

I'll reconsider the subscription cancellation if they fix this mess.

Previously:

• Not so sweet advice
• Extensive annotated archive of OIAed correspondence at MoH on sugar taxes
• The whole 'sugar' tag...

Part time work and the wage gap

The Herald's reporting on a new tool they've produced to investigate the gender wage gap. Enter your broad age and profession (ANZSCO 2006), and it will tell you how much more (less) you earned than a woman (man) of the same age and profession. How?

This annual calculation makes the assumption of working 40 hours a week and 52 weeks a year. These rates are before tax.
There are a range of reasons which can influence the number of hours men and women work.
If an occupation has been selected we calculate the difference in male and female median hourly wages for that ANZSCO 2006 category and age group. If no occupation has been selected the overall difference in median hourly rates is displayed.

Last year, I'd noted that there are some pretty substantial differences in full-time and part-time work choices that affect the overall pay gap results:

One simple change could almost halve measured pay inequality. What is it? Have women replicate men’s split between full-time and part-time work. Ok, maybe that’s not so simple. But while there are 7.05 full time male workers for every part-time male worker, there are 1.96 full time female workers for every part-time female worker. And part-timers always earn less than full-timers. Interestingly enough, part-time female workers earn more than part-time male workers – for the obvious reason given those numbers.

If you re-weighted the pay gap using women’s median earnings for full-time and part-time work, but men’s split between full-time and part-time work, the pay gap would drop from 11.9% to 6.6%. And that’s without controlling for a pile of other important stuff, like time spent outside of the workforce or differences in education background and the like.

The mix between part-time and full-time work matters. Part time work generally pays less per hour than does equivalent full-time work - except in some higher end contracting that won't much be evident in median earnings anyway.

If we look only at full-time earnings, men make $25 per hour and women make $23.02. Or 92 cents for every $1 of male earnings. If we look only at part-time earnings, men earn $16 per hour and women earn $17.65 per hour, or $1.10 for every $1 of male earnings. If we bundle those both together, because a greater proportion of women are in part-time employment which pays less overall, you get a larger pay gap: women earn $0.88 for every $1 of male earnings.

So, what to do about it? I'd suggested (as a first cut) equivalising things so that you were comparing men and women on the same basis, such that they'd have equivalent proportions of men and women.

When I asked the Herald why they hadn't accounted for full versus part-time employment, they noted they were following Stats' recommended procedure:

We can measure a gender pay gap for either full-time or part-time workers separately. When we do this, we find that for full-time workers only, the gap is smaller but has a similar up-and-down pattern over time as the ‘total’ gender pay gap. For part-time workers, the gap reverses – women who work part time typically earn more (per hour) than men who work part time.

When we separate workers into full-time and part-time groups, we hope to remove the differences caused by the types of jobs that offer (or don’t offer) part-time hours. However, splitting workers into full-time and part-time work can change the balance of other factors that affect pay, such as age. For example, females working part time are more likely to be older than males working part-time.

Overall, we recommend using the median hourly pay across all workers, rather than using full-time or part-time workers separately.

That's all well-and-good, but you can't really go from there to talking about the resulting gap reflecting failures in equal-pay-for-equal-work, as some of the quoted folks in the story then do. Part of the salary bundle in part-time work is the flexibility it gives you. That is worth something to those in part-time work or they wouldn't be choosing it. And because it is valuable to employees and costly to employers, it draws a pay penalty.

I really can't recommend strongly enough that folks running the pay equity beat read Claudia Goldin's summary of the state of the literature. It was her 2014 American Economics Association Presidential Address. Or, just listen to her interview with Kathyrn Ryan from 2014.

Pollution taxes?

The Environmental Defence Society wants a shift to taxing pollution. It sounds fine in principle, but there may be a few problems in practice.

For some things, like GHG emissions, where the negative effect is global rather than localised, it's both simpler and harder. Taxation is simpler because you don't have to worry about local circumstances: a tonne of CO2 emitted anywhere has the same cost. So the price per tonne should be the same everywhere. But it's harder because, if only a couple of countries impose carbon pricing, you can wind up with perverse outcomes like production shifting from relatively clean countries imposing a tax to relatively dirty ones that don't. Optimal policy is then harder to figure out. New Zealand should be a part of any comprehensive international taxation or trading regime. But absent one, we may do better with tech investments into pastoral emission abatement.

For others, like water drawing rights, the right policy is pretty obvious, but it could be a bit complicated to set up in practice. John Raffensperger, formerly of the University of Canterbury's operations research group, wrote a series of papers (here, here, and here) showing how to do it. You need to know a fair bit about the underlying hydrology. But if you know that, you can set up a smart market in which farmers bid for drawing rights at different drawing nodes, and the system weighs up the effects of drawing at different points. Unfortunately, Canterbury's Management department killed the operations research group as part of budget cuts and the usual depressing university politics, so there isn't really anybody around pushing this kind of solution any more. Raffensperger's now at the RAND Corporation.

Going beyond that, into things like nutrient runoff, nitrates and the like - that gets a bit harder again. Like water drawing, the effects will be highly location specific and will depend critically not only on what other neighbours are up to but also on what downstream water uses are. But it's easy to meter how much water is drawn from a river or aquifer. Metering nutrient runoff is harder. Agreeing on downstream usages is much harder - and especially around option value. And, because there is no single effect across the country, you could never run it as a straight pollution tax and expect decent outcomes. Finally, from a public choice perspective, we have to worry about those who'd set tax rates to maintain every river as a potential drinking water source rather than recognising that they can vary in value.

The EDS proposal was summarised by Jamie Morton at the Herald, drawing from discussion at Pure Advantage.

How the Environmental Defence Society's proposal would work

• The tax would be based on land area and the intensity of its use as identified from high-resolution satellite imagery and land title information.
• It would put a price on all the major environmental impacts of intensive land uses, including biodiversity loss, greenhouse gas production, accelerated runoff and pollution from nutrients, sediment, fecal coliforms and toxins.
• Low intensity land uses that supply largely natural ecosystem services would earn a rebate at a per-hectare rate commensurate with opportunity and management costs borne by the landowner and the value of those services to society.
• Different parts of a single property would therefore be subject to different per-hectare tax rates based on the cover on, and use of, each part.
• A landowner could minimise tax liability by confining the most environmentally intensive uses to small areas and improving the state and legal protection of natural areas.
• Revenue raised could fund increased conservation and environmental management, climate change mitigation or other general government expenditure. Similarly rebates could be spent at the landowners discretion on conservation or other priorities.

EDS suggests that the tax could both improve environmental outcomes and reduce reliance on more damaging taxes.

While I like the idea of subsidising land uses that provide national benefit rather than compelling such use, the tax scheme here seems to be trying to serve too many purposes at once. You'd first have to set a baseline level of environmental intensity against which other uses would be compared for tax or subsidy. That baseline plus sharpness of tax/subsidy gradient would determine whether the scheme were revenue neutral, revenue-raising, or impose net cost on the budget. Ideally, you'd set the gradient to internalise the externalities, not to achieve any particular revenue-raising target. And any subsidy should be far more based on the value of those services than on costs of production. Whatever money comes out of it should be a side-effect.

I'm also really not sure how you could judge this based on high resolution satellite imagery. Again, any tax or subsidy would have to depend not only on your own use but also the neighbourhood. Imagery could capture much that's correlated with the variables of interest, but wouldn't directly measure it. If I've run a better water treatment plant on my milking shed and you've not, could the satellite pictures tell the difference? If we're both then taxed on an average, what does that do to your willingness to invest in better kit?

It's all the kind of thing that I wish could work, but has a lot of technical difficulties even if we assume that the system would be run sensibly. Once we think about the very likely politicisation of the scheme - it gets more worrying.

Morton quoted me as follows:

Dr Eric Crampton, head of research at the New Zealand Institute, said that in principle, taxes on pollution were far better than taxes on income so long as they were set properly - but this was very hard to do.
A land use-based tax could be unfair if a farmer who used better practices to reduce nutrient runoff and faecal coliform - which were invisible to satellites - was made to pay the same rates as a neighbour who had not.
"Second, the environmental cost of activity on any one piece of land depends a lot on what else is going on in the area - setting a tax and subsidy scheme to account for that does not seem simple."
Environment Minister Dr Nick Smith has not reviewed or received any advice on the concept, but he also said the approach could be flawed.

Alcohol Healthwatch Is Making Stuff Up, Again

Here's Alcohol Healthwatch in the New Zealand Herald.

Rising economic confidence and "aggressive" marketing techniques are the driving factors behind an 8.9 million litre rise in alcohol availability last year, says one concerned health organisation.
Latest figures from Statistics New Zealand, which compared figures over the last five years, show the total volume of alcohol available in New Zealand rose to 466 million litres last year - the equivalent of 2.1 standard drinks per person aged 18 and over per day.
It represents an increase of almost 9 million litres from 2012, according to Statistics New Zealand.

The total volume of alcohol available for consumption in New Zealand did increase last year. So too did population. We usually look at per capita trends rather than total volumes.

Go to Stats NZ's Infoshare service. I cannot link directly to the data series, because StatsNZ uses session codes that won't allow it. But the series you need is ALC005AA. Copy that into the search bar that I've linked to above. Then select all years all series. This is what you get when you port it into Google Docs to get graphs.

So, what can we see here? Per capita alcohol availability dropped substantially from 1986 to 1988, levelled off, dropped substantially from 1990 through 1996 (recall that the big liberalisation came '89), then bounced around a bit with a mild rise through 2010 followed by a mild fall. The average per capita figure for those aged 15+ was 9.4 litres over the whole period, was 9.2 litres over the period since 2000, and was 9.3 litres for the period 2003-2013. The 2013 figure was 9.2 litres. Eyeballing it, we've had a slight reversion after a substantial decline in consumption, followed by a levelling-off since 2005.

The Herald's citing Alcohol Healthwatch as saying that rising economic confidence and aggressive marketing are behind a rise in alcohol availability, using "total volume of liquid containing alcohol" as the measure. The volume of pure alcohol per capita is basically flat over the last decade, but with a mild decline from 2010 to present: the period coinciding with "rising economic confidence". And if alcohol marketing has gotten more aggressive over the last year, it's had no obvious effect on consumption. If we take Rebecca Williams at her word that the marketing's gotten more aggressive, then I guess we might start worrying less about aggressive marketing.

Let's continue. Here's more from The Herald:

However, there was concern that drinkers were moving to stronger types of alcohol as further analysis of the figures showed the percentage of beer, as a proportion of total volume available, fell from 81 per cent in 1996 to 62 per cent in 2013.

Wine rose from 16 per cent to 23 per cent, and spirits and spirit-based drinks such as RTDs rose from 3 per cent to 15 per cent in the same 17-year period.

Rebecca Williams, director of Alcohol Healthwatch, said the figures appeared to confirm fears around ready-to-drink (RTDs) beverages.

"One of the worries for us has been that the RTDs ... would be exposing those young drinkers to the spirit brands and the heavier spirits, and I think that is happening," she said.

"The spirits component has increased, wine is going up on a fairly steady basis, and the worry about the wine is that it too is actually quite a larger volume of pure alcohol [per drink], so we're seeing a shift to the heavier alcohol products."

Drinks such as wine were being marketed "aggressively" in outlets like supermarkets, as well as campaigns by drinks companies, which were competing heavily with each other, she said.

The figures could show a trend back up to peak levels in 2008.

"Seeing an increase this year, seeing the economy come back on line, all of those things to me will start to signal some concerns that we could be tracking back up again," she said, saying that "when people are feeling better [financially] they spend more on booze".

Williams is right on a couple of points. Beer has taken a declining share of total alcohol over the period since 1986, but with a very recent levelling-off. The StatsNZ series ALC016AA has the total litres of alcohol available per beverage category rather than per capita, but it's still useful for assessing relative market share across the categories. When we port it over to Google Docs, and with a bit of wrangling,* we get this:
Wine seems to have levelled off at a third of total alcohol since 2006 or so, spirits have risen markedly over the last decade, and beer's dropped. So Williams is right about that. But all of that needs to be read against the broad flatlined trend in per capita total consumption. She's painting the shift to potentially higher alcohol products as representing an increase in consumption of alcohol when per capita alcohol availability hasn't changed.

Further, is Williams suggesting that the beer companies don't market aggressively against each other? Didn't we hear a lot of outrage about aggressive beer promotion at the Rugby 7s? We can't just look at a change and blame aggressive marketing for those components that get a category increase when there's pretty similar marketing for the components that get a category decrease. My weekly supermarket flyers have more pages of wine ads than of beer ads, but there are plenty of ads for sales on slabs of beer too.

Because StatsNZ changed category definitions, we can only split out low and high alcohol spirits starting in 1995. Here's category shares from 1995 onwards:
When I look at this, I see pre-mixed, lower-alcohol spirits displacing beer rather than building demand for pure spirits. And, again, per capita consumption hasn't really grown much over the period.

Summing up, where Williams comes up with marketing- and economy-based explanations for increases in total alcohol availability and for category shifts, and worries that increased consumption of low-alcohol spirits is a gateway to harder spirits, we find instead:

• No increase in per capita alcohol availability;
• No plausible story explaining why marketing has been so effective for RTDs and wine and so useless for beer;
• No plausible story explaining why improved economic conditions helped RTDs and wine but hurt beer;
• No plausible story explaining why per capita trends in total alcohol availability show a mild decline from 2010 through 2013, the period of economic recovery, when they're using economic recovery to explain changes in total alcohol availability;
• What looks like roughly constant market share for Beer + RTDs rather than RTDs being a gateway to proper whisky, though it's always possible that RTD drinkers will mature into spirits rather than shift to beer; either way, there's no increase in per capita availability. 

Let's then help the Herald out a bit by re-writing their first couple paragraphs for them.

The total volume of pure alcohol available per person in New Zealand remained constant this year. While there was an 8.9 million litre rise in the total quantity of alcoholic beverages available this past year, this increase is largely explained by a rising population combined with a shift away from spirits-based drinks, which have more alcohol per unit of total liquid, and towards medium-strength beer and wine, which have a lot more water with their alcohol. And, this category change mostly looks like noise given the longer-term trends.

While professional anti-alcohol advocacy groups, whose existence depends on shouting "Monster! Monster!" whenever a new alcohol stat comes out, blamed rising economic confidence and aggressive marketing for the increased total volume of alcoholic beverages, Statistics New Zealand noted that, "the volume of pure alcohol available per person aged 15 years and over (15+) was unchanged from 2012, at 9.2 litres per person." While anti-alcohol activists try to fuel the perception of crises by citing figures on the total amount of alcoholic beverage that's been available for consumption, it's best to look at statistics on per capita pure alcohol availability.

I wish that Monster-Shouting didn't sell papers.

Previously:

• More binge drinking reports
• Alcohol Healthwatch
• Surprise surprise surprise

Update: Thomas Lumley reached a similar conclusion.

* The period prior to 1995 uses the discontinued series on total wine; from 1996 onward, I use the revised total wine series. It doesn't make much difference but lets me have a longer time series.

Uber opposition

I'd expected that the Taxicab Federation wouldn't like Uber.

In last week's Herald, they protested that Uber would need to become an Approved Taxi Organisation. [HT: EdBlog]

NZTA [NZ Transport Agency] spokesman Andy Knackstedt said there were many requirements that must be met for establishing a company as an 'Approved Taxi Organisation' such as clearly displaying fares and driver identification, using a tested fare meter and having an in-vehicle security camera system installed.

"If Uber did not establish themselves as an ATO, they would rely on existing ATOs and their drivers integrating or using their system," Knackstedt said.

...

University of Canterbury senior lecturer in economics and transport commentator, Eric Crampton said Uber may be able to side-step taxi industry regulations by hiring drivers with a P endorsed drivers' license and using unmarked vehicles to operate as a 'private hire service'.

"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," Crampton said in his blog.

The New Zealand Taxi Federation has voiced safety concerns about the growth of app-based taxi booking systems becoming available around the country.

Other transport apps to launch in New Zealand recently are Zoomy, in use by taxi organisations, and Cab Chooze, along with other apps developed for taxi companies.

In a letter to the NZTA, Taxi Federation executive director Tim Reddish called for the apps to be shut down until the companies prove their drivers are properly licensed and operating under the control of approved ATO's.

"In our view any app-based taxi service delivery system must also ensure that customers are protected from unlicensed drivers and untested as fit for purpose vehicles," Reddish said.

Again, I am not a lawyer. But it looks to me like Uber could run under existing private hire service regulations. I expect that the Taxi Federation will do their best to block it.

If I were the Taxi Federation, I'd be claiming that an app-based immediate hire is a lot more like flagging down a cab than it is like an advance booking; if I were Uber, I'd say it's rather more like calling a bunch of car companies to see who'll give the best rate. I think the latter's the more accurate description and that the private hire regs could then apply, but again, I'm not a lawyer. If running as a private hire service under Section 6 hits the 'too hard' basket, Uber could still come in as an app booking system for more standard cabs, but we'd lose much of Uber's benefit: the ability to surge supply into the market with higher fares during periods of anticipated high demand. It's harder to bring part-timers into the market when they'd need to be running a signed, metered, and camera-equipped car.

And a big thank-you to Daniel Lynch at the Herald for doing this properly. He quoted from the blog while linking to it to provide context for those wanting the additional context. Nice job!