For want of a CURF

Some things are just hard to know without decent public use microdata.

There's been a lot of furore about ACT's flat tax proposal, with many on the left outraged that a libertarian party would support lower taxes.

Many have also pointed out that a 17.5% flat tax would represent a tax hike - not just for those currently on the 10.5% lowest tax rate, but also for those who are at a low enough point in the 30% tax band that the inframarginal increase in taxes on the first $14,000 of earnings would outweigh the reduction in taxes on earnings above $48,000.

No quibbles on that part - it's just maths.

But I am a bit more curious about household distributions. How many of those who would see that inframarginal increase in taxes are in households where the other earner would see a real tax cut accompanied by a drop in their tax rate? I remember Pacheco and Maloney's work showing that many minimum wage earners are in higher earning households, so the minimum wage is poorly targeted. I expect there could be similar effects here.

To know that we'd need a two-way earnings table. The columns would show the earnings of the primary household earner, split into different bands. The rows would show the earnings of the secondary household earner, split also into different bands. Each cell would provide the count of households where the primary earner earned the column amount, and the secondary earner earned the row amount.

For households with two earners on lower wages, the flat tax would be a tax increase. For some of those, it would only be an inframarginal tax increase. For others, it could represent a tax increase at the margin (anyone earning less than $14,000 per year).

For households with one higher earner and one lower earner, I'd expect most would see a tax reduction with effects at the margin, but I don't know the numbers.

And households with two higher-earners would definitely see a tax cut.

I guess the substantive point is that a lot of the folks being currently touted as seeing a tax hike under ACT's proposal would be in households where the net effect would be the opposite, and where the tax hike part would be inframarginal while the tax reduction part would have effects at the margin. We don't expect big labour supply effects on primary earners from tax cuts, and we do expect more supply responsiveness from second earners - but if the effect on second earners is more likely to be inframarginal, then that's a bit different.

And the more substantive point is that it's just dumb that it's hard to know what the numbers actually are. In the US, I'd just download the ACS PUMS and tally it. Here, because Stats' back-end systems are archaic, the only tables we have are the ones somebody thought to code in ages ago. You can't dynamically generate them.

Stats does have Confidentialised Unit Record Files, but you have to go through an application procedure to get them. And, once you have them, you can only use them for that one specific thing that you asked to use them for, then delete them. If you want to check something out just out of idle curiosity - like this tax question - well, you can't. Even if you have the CURF from a prior request that you're still working on, you have to get permission to use it to ask this specific question.

And the most recent CURF that might answer the question would be the one from the 2013 Census; they don't CURF the HES.

I have a query in with Stats in case this table already exists somewhere on a disused server in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard', as that's always a possibility. But this kind of stuff shouldn't take hassling Stats staff (they are exceptionally helpful, and it wouldn't surprise me at all if somebody there is already building the table) or doing a whip-round of other economists to see whether they know whether this kind of data exists. You should just be able to download the darned Census CURF and check it - or have back-end systems that can support the kind of data access that IPUMS provides.

UPDATE: Stats' helpful advisor informs that that cross-tab does not exist and would take either a custom data request, or a research project through the IDI.

UPDATE2: Customised data requests charge out at $155/hour. If Stats' back-end systems weren't rubbish, or if they decided to free the Census CURF, any of us could just do it on our own.

Haidt!

Jonathan Haidt will be speaking in Auckland on 1 August. I've seen him present before; he's excellent. 

In 2012, US psychologist Jonathan Haidt rose to fame with the publication of his book The Righteous Mind: Why Good People are Divided on Politics and Religion. In its review, The New York Times called Haidt’s book “a landmark contribution to humanity’s understanding of itself.” It has since gained widespread praise from commentators left, right and centre (see here).

Both Foreign Policy and Prospect Magazine have listed Haidt on their respective rankings of the world’s Top 100 public intellectuals.

Haidt has since published extensively on threats to academic freedom and the polarisation of political debate on campus. His latest book (with Greg Lukianoff) is titled, The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure.

The New Zealand Initiative is proud to support Jonathan Haidt’s first visit to New Zealand.

This will be a rare opportunity to meet one of the world’s most original thinkers in New Zealand. Haidt’s work in moral psychology has deep implications for many of our global and domestic political debates.

Tickets are available here. There will also be a much smaller Wellington event with Initiative members.

A sugar intervention that actually looks promising

Usually I'm pointing to daft stuff on the sugar file. 

But my jaw dropped when I read this one. An intervention that sounded sensible, that's been piloted, that looks effective, and is quite possibly cost-effective too.

Here's RNZ:

But dental decay in even the most deprived communities could be prevented by the simple method of brushing teeth once a day at school, and a Northland study had proved it, and the government should take heed, Dr Stallworthy said.

In 2015, DHB dentist Ellen Clark set up a highly controlled tooth-brushing trial in Northland schools for her Master's thesis in Public Health, through the University of Otago.

A teacher aide was paid to supervise tooth-brushing sessions, once a day for 170 children at Kaitaia Intermediate School.

Several other schools were selected as controls, all of them in areas of high deprivation, where children were given a toothbrush and fluoride toothpaste, but had no supervised brushing sessions at school.

More than two-thirds of the children were Māori.

Ms Clark said she had hoped to improve the children's oral health - but the results were far better than she dared to hope.

"The children who were brushing (at school) had a mean number of 11.7 tooth surfaces that improved - that is, they remineralised or (the decay) reversed. In comparison, the kids who were not brushing had 8.6 tooth surfaces that deteriorated over the year which was quite profound, I wasn't expecting that - I thought you'd have to follow these kids over several years before you saw such significant results."

Tooth-brushing programmes in schools in Denmark and the UK had been showing similar results, Ms Clark said.

One of the better known ones, the Scottish Child Smile project had saved the government an estimated $NZ9.1 million in just two years.

The low-tech intervention could do the same for New Zealand, at a relatively low cost, Ms Clark said.

Supervision was critical, but the cost of a teacher aide, for an hour a day per school, was tiny compared to the potential savings in teeth and dollars.

No equipment was needed apart from brushes and toothpaste - the children in the Kaitaia study spat into paper towels, and rinsed their brushes at the water fountain.

The beauty of the study was that it removed the usual inequalities in oral health, caused by poverty, and the results had prompted interest from overseas, and from other DHB's around New Zealand, Ms Clark said.

She was now working on a detailed cost-benefit analysis, in the hope the government might consider rolling the programme out through Northland.

And though the study is over, Kaitaia Intermediate has kept up the toothbrushing - and continued to report good results, Ms Clark said.

And here's the Masters Thesis.

It's a shame that it seems needed, but here we are.

In related news, a friend emails me a public health anecdote from the mid-2000s. According to the anecdote, an academic did some joint research with MoH into rheumatic fever and found that shared toothbrushes were part of the problem, as were shared beds - the recommendation then was to hand toothbrushes out at GP offices to prevent that transmission vector. Toothbrushes are cheap.

According to the anecdote, MoH buried that part of the research in case it reflected badly on ethnic groups more likely to share toothbrushes. The collaborator never worked with MoH again due to frustration over the barring of the findings' being used.

If anyone knows more about this one, drop me a line.

Afternoon roundup

The afternoon's worthies on the closing of a week's worth of browser tabs:

• Hamish Rutherford explains why, despite Keith Ng's insistence that any mildly clever move in a Google Search that gets you something that somebody didn't want you to see is indeed a hack, the inappropriate use of the term kinda matters. Keith now recommends we use the term cyberbadtouch instead of hack - I like it. 


• Environmental monitoring and reporting at a few of our Councils could stand improvement.


• Is there any good reason that the RMA makes it hard to put up new wind farms? When oh When will have a fit-for-purpose RMA?


• The Irish Central Bank's recruitment process for its next Governor cost €70,236. I wonder whether their headhunter talked to any senior economists around town.


• Great piece from Damien Grant at NBR on the coming regulation of the insolvency industry. I'd be using it in my Public Choice class were I still in that world. A snippet:

  ...the Ministry of Economic Development proposed, in 2010, a simple bill allowing the Ministry to ban those who were acting dishonestly from being liquidators.
  
  The industry body at the time, known as INSOL, sought a far more intrusive regulatory model. It has succeeded.
  
  Parliament has adopted a ‘co-regulatory’ regime, where the coercive power of the state is delegated to approved industry bodies who will issue licences to those who want to be insolvency practitioners.
  
  This is a terrible result. In a field with 50 active firms dominated by a handful of large players, the industry will set its own guidelines, decide who can and cannot practice and will investigate complaints against themselves.

• Tom Chivers has a very nice piece reminding everyone of the risks of replacing GDP with dodgy metrics.


• I completely fail to understand a public health establishment that spends all its time campaigning to ban anything with sugar in it while it seems there's zero consequence for ignoring doctor's quarantine advice and flying from Auckland to Christchurch, round-trip, while infectious with the measles. Could the New Zealand airlines at least ban this clown from their flights in future?

What else could he say?

Well, turns out I was at Makhlouf's farewell party, in a way.

I'd been initially invited to the thing via a Treasury 'Save the Date', then uninvited for obvious reasons after I pointed out, again, the depth of deterioration at Treasury under Makhlouf's watch. The quality of policy advice has dropped substantially, as reported in Treasury's annual reports; the stakeholder surveys show declining confidence, and I think it's due to Secretary Makhlouf's administration having focused on faddishness over rigour and the deterioration of economic competence in the organisation.

When RNZ's Madison Reidy ran a whip-round of economists, she couldn't find anyone who disagreed with me on the deterioration at Treasury.

Here's Finance Minister Robertson, reported in Politik at last night's farewell event. 

Robertson also praised Makhlouf for making Treasury a more diverse place and addressed recent criticism from the NZ Initiative economist, Eric Crampton, that Treasury was putting too much emphasis on diversity and was not hiring enough highly qualified economists.

“ My message to Eric Crampton, the NZ Initiative and the Taxpayers' Union Is that the Treasury should have economists.but it should also have people from other walks of life who aspire to be part of an organisation that delivers to New Zealanders better-living standards," he said.

Peter Hughes was also reported to be fulsome in praise of Makhlouf. Of course he would be. The State Services Commission completely screwed up in having Gabs reappointed in 2016.

If Robertson and Hughes want to ignore the failures at Treasury, well, it's their administration that will suffer - and the rest of us. A Finance Minister needs quality advice, and he will not get it.

I hope that this is just a "well, what else could he say at the man's funeral" thing. But he didn't need to endorse Treasury's awful hiring practices.

Update: I'm more annoyed about this the more I dwell on it. The next CE has to know he has the Minister's backing in fixing the problems at Treasury. I thought Robertson understood the task ahead. At every point, I've been critical of Treasury but optimistic about Robertson's having some desire to fix things. I am updating substantially on this. Will he even be able to get the kind of candidate he needs if he's signalling that he thinks Treasury's composition is a-ok?

What counts as 'Moderate' reliability for Cochrane?

Glenn Boyle prompted me to hit the Cochrane Review's findings around SSB price interventions a bit more closely.

If this counts as moderately reliable evidence, well, draw your own conclusions about the weight to put on the stuff they count as low or very low reliability.

Here are the three studies they evaluated.

1. Cornelsen 2017. They looked at a 10 pence price hike on SSBs across a chain of UK restaurants. 9% reduction in SSB items sold per customer. While there was a 22% increase in per-customer sales of fruit juice on the main menu, there was a 10% drop in fruit juice sales on the kids' menu, a 7% drop in sales of diet cola, and a 6% drop in sales of bottled water. They did not run it as a diff-in-diff, just looked at pre/post. Tap water isn't measured; could have been generalised shift towards tap water. And there's weird stuff - the change in consumption in levied SSBs is reported as significant with a p-value of 0.004, but the 95% CI runs from a -15.21 drop to a 3.15 increase. Typo? Who knows. It's public health. No discussion of whether there just might have been a coincidental generalised shift to tap-water given the drops in sales of diet colas that didn't get the price hike. Nothing on whether there was substitution into desserts. And it's all at Jaime Oliver restaurants; their shifting towards bankruptcy over time plus his generalised increasing awfulness may have affected customer cohort too. If his big menu reorganisation and self-imposed sugar tax was accompanied by a giant "I'm so great look what I did" publicity campaign, as it almost certainly was because it's Jamie Oliver we're talking about here, well, you might think that the clientele might have shifted away from the people who like soda to the kind of people who like folks that yell at people who like soda. No accounting for any of that. 
2. Blake 2018. A price intervention in a single convenience store reduced sales at that single convenience store. It was the convenience store in a hospital, so maybe it was a bit harder for folks to pick other stores. But come on. 
3. Breeze 2018. Leisure centres in Sheffield increased SSB prices by 20 pence and saw a 31% reduction in sales per customer, with some increase in sales of diet soda. No clue how many people brought in their own soda in their gym bags. Oh, but the intervention also included staff training and publicity and stuff that might have had additional effect on their own around salience of health and price.

Here's Beaglehole on reading this latest evidence:

But when sugary drinks are made more expensive, or sugar-free alternatives made cheaper, sales fall, the researchers found.

"The evidence is unequivocal... you put up the price, consumption goes down," NZ Dental Association spokesperson Rob Beaglehole told The AM Show on Thursday.

"You get rid of junk food from schools, consumption goes down. Better sugar labelling is again another way of reducing sugary drink consumption. There's lots of different ways that we can act."

I'll never disagree that demand curves slope down. But the elasticity matters. And this latest Cochrane Review ... well, if that's the basis for recommending generalised hikes in SSB prices via soda taxes...

Sweet restrictions

The Science Media Centre asked me for comment on the latest Cochrane Review on interventions around sugar.

Reading through the thing, I was struck by the weakness of evidence around a lot of the kinds of things folks here like to demand that the government do.

Cochrane rates the certainty of evidence on a scale that runs: very low, low, moderate, high.

The interventions with the strongest evidence base around environmental interventions aimed at reducing consumption of sugar-sweetened beverages were rated "moderate". Nothing rated high. Interventions rated as having "moderate" evidence included:

• Improved access to low-calorie beverages in the home environment
• studies in this group would provide free home delivery of bottled water or diet drinks to people often in places with unreliable access to clean drinking water, and found reductions in soda consumption as consequence. 
• Multi-component community campaigns focused on SSBs
• Results here drew from one study. 
• Government food benefit programs with incentives for buying fruit and vegetables and restrictions on the purchase of SSB
• Here, studies looked at interventions restrictions on purchasing SSBs using the equivalent of New Zealand's WINZ payment card. The studies found reduced sugar consumption. New Zealand already bans a lot of classes of purchase on the payment card, including alcohol and tobacco. It wouldn't be infeasible to do it here, but there would be a lot more SKUs that would have to be loaded up properly into the card - it could prove difficult in practice. Checkout clerks are already well trained around identifying alcohol and tobacco purchases; knowing which beverages would be banned and which would not would require the back-end systems being programmed correctly. I expect it wouldn't be a simple thing.
• In-store promotion of low-calorie beverages in supermarkets
• Evidence here all drew from Foster 2014. That was a randomised trial looking at in-store promotion of healthier items: lower-fat milk, ready-to-eat cereal, frozen meals, in-aisle beverages (Diet Pepsi and Aquafina water), and checkout cooler beverages (zero calorie beverages and water). Effects were often statistically significant, but I'm not sure that a store selling 24 more gallons of skim milk and 53 more gallons of 1% per week are really all that big a deal. 
• Price increases on SSB
• Three studies found that places chosen for soda price interventions, like a leisure centre or a particular corner store, saw reduced sales of those price-boosted items. But it seems kinda likely that folks would just be purchasing their soda at shops next door that weren't part of an experiment involving higher soda prices. You oughtn't generalise from it. No surprise that Beaglehole does generalise from it though. 
• Small prizes for the selection of healthier beverages in school cafeterias
• Evidence ranged in strength from moderate to low. In the Hendy 2011 study (rated moderate; the others were low), there was a three-meal-per-week reduction in the number of meals with unhealthy beverages selected in an intervention in primary schools where kids' meals were monitored and they got token rewards from parent volunteers chosen as monitors. If your school has that many available parent volunteers, I guess it's not that high cost to implement - though you might imagine other things parent volunteers in schools might more usefully help with. 
• Traffic light labelling
• Evidence here was rated moderate in reducing consumption of red-labelled beverages. 

Everything else had evidence rated as low or very low confidence. 

Here's what I told the Science Media Centre about it; Newshub picked up a bit of this commentary but didn't contrast the price bit I'd noted with how Beaglehole approached it.

The Cochrane Review provides an important synthesis of the evidence regarding non-tax interventions aimed at reducing consumption of sugar-sweetened beverages [SSBs].

The review found that many often-recommended measures have little evidentiary base, with certainty of evidence rated as very low. Interventions in this category included measures like healthier vending machines in workplaces and schools, restrictions on the number of stores selling SSBs, urban planning restrictions on new fast-food outlets, and menu-board calorie labelling. No studies were found that might provide basis for restrictions on advertising.

Some measures showed promise, with a moderate certainty of evidence established across numerous studies.

Improved access to low-calorie beverages in the home environment reduced SSB consumption, but many included studies focused on places without reliable access to clean drinking water. Regular home delivery of free non-SSB drinks across broad swathes of the population seems unlikely to pass any reasonable cost-benefit assessment, and especially in places where piped water is of reasonable quality.

Restrictions placed on purchases funded through food benefit programmes reduced SSB consumption, and could be implemented in New Zealand by adding SSBs to the list of prohibited purchases on Work and Income Payment Cards. But the administrative costs may not be trivial, and the imposition on low-income households who enjoy soda occasionally should not be ignored.

Small prizes for selecting healthier beverages in primary school cafeterias showed some promise.

While price increases in individual targeted stores showed reduced sales of SSBs in those particular venues, the surveyed studies in that area do not look at overall consumption; people could easily have shifted to purchasing from outlets where prices had not been hiked.

And while the review authors tentatively suggested a somewhat broader set of interventions may prove effective, they also warned that their confidence in the likely effects is low to moderate. Rather than providing evidence for policy change, we should view the report as suggesting measures potentially worth trialling within an appropriate experimental framework designed to improve the evidence base.

Where the evidence base presented for any substantial effect of interventions is moderate at best, even without being evaluated as part of a broader cost-benefit assessment that weighs implementation costs and costs to consumers, we should be highly sceptical of any calls for strong intervention based on this report. It should rather temper our enthusiasm for large-scale measures likely to impose substantial cost for rather less certain benefit. Pilot studies and trials of some of the more promising interventions may be warranted.