Thursday 31 December 2009

Let the irrational exuberance commence!

Bruce Robertson of the Hospitality Association of New Zealand writes in Canterbury Today (sorry, no link I'm aware of):
The Berl report has been picked up as a rallying cry for action by evangelists and public health lobby, and by action they mean intervention, controls on liquor outlets, hours of operation, location of outlets and huge price hikes.

The Berl report, which estimates the cost of alcohol to the New Zealand economy at $4.8 billion, has now been absolutely discredited by two economists...

...despite the report being completely discredited, the $4.8 billion figure will continue to be quoted. Secondly, and more importantly, it raises the question of the research influencing policy.

That the Berl report was commissioned and funded by the Ministry of Health and ACC is in itself an absolute disgrace.
Indeed (hit the BERL tag, below, if you've not been following the ongoing saga.)

Enjoy your New Year's libations! And remember: if you consume more than 4 standard drinks -- less than two pints of beer -- you're by definition irrational according to BERL. Let the irrational exuberance commence!

Tuesday 29 December 2009

Fundamental rights

Kanazawa today hits on a very Hansonian point: why do we care about some kinds of inequalities but not others? Bottom line from an ev bio perspective is the "right" to have kids. But some folks are stuck without a willing partner.
In the United States, millions of people – mostly, young, poor men, the same people who don’t have health insurance or choose not to take advantage of the available health care – are left mateless, sexless, and childless, and are destined to die as total reproductive losers. In every human society, there are more childless men than childless women.

How come nobody cares that millions of people in the United States fail to achieve the ultimate goal of all biological existence, the meaning of life itself? Why isn’t it the government’s job to make sure that every American has sex regularly and frequently and produces children? Why doesn’t the government import surplus women from Russia and Ukraine and distribute them at taxpayers’ expense to millions of young, poor men who can’t otherwise get laid?
Back in September, Hanson wrote:
Yet other “insensitive” categories are associated with huge inequalities, which few folks seem interested in talking about, much less considering how policy might influence. There is no social pressure whatsoever against maligning these groups. Especially striking are inequalities in attractiveness as a friend, lover, etc. not mediated by sensitive categories. These factors include physical appearance, vigor, charisma, personality, height, etc. Folks are well aware such inequalities exist, but have little concern about them, and no interest in policies to reduce them.

An especially striking example is inequality among men in their ability to attract women as lovers. If you don’t like “alpha/beta” labels, then call it what you will, but there are consistent correlations among men in this regard, which are consistently correlated with insensitive categories. While this inequality has large consequences for utility and happiness, there is no interest in reducing it, and people feel quite comfortable insulting these type of “losers”.
The second welfare theorem works for money endowment, but I have a hard time seeing how it could work for these other kinds of inequalities, or at least how it could work without insanely high deadweight costs.

Monday 28 December 2009

Calculated risks

Nate Silver over at FiveThirtyEight runs the kind of back-of-the-envelope calculation on the risks of being in a hijacked aircraft that you might expect as part of a McKinsey interview.
There were a total of 674 passengers, not counting crew or the terrorists themselves, on the flights on which these incidents occurred. By contrast, there have been 7,015,630,000 passenger enplanements over the past decade. Therefore, the odds of being on given departure which is the subject of a terrorist incident have been 1 in 10,408,947 over the past decade. By contrast, the odds of being struck by lightning in a given year are about 1 in 500,000. This means that you could board 20 flights per year and still be less likely to be the subject of an attempted terrorist attack than to be struck by lightning.
What's the most you'd pay for insurance against a 1 in 10.4 million event? Since the value of a statistical life, backed out of these kinds of calculations, is $7 million, our best guess is that folks would be unwilling to spend more than a dollar to insure against this risk. I get the feeling that the TSA's budget is considerably more than that.

Ok, class: Assume that if you reduce TSA spending by an order of magnitude the risk of a terrorist incident also rises by an order of magnitude. By how many orders of magnitude ought the TSA budget be reduced to get spending to a level commensurate with the estimated risks?

We now resume our regularly scheduled service

Apologies for the interruption of service. Google's anti-spam bots decided that this blog was spam.

Google's bots can of course have type I and type II error; if they're on the frontier, they can only trade off killing real blogs against failing to kill spam blogs. I would have thought, though, that an efficient algorithm would weigh at least somewhat a site's Google PageRank. Offsetting is PR6: one below the University of Canterbury's main site (PR7). If a spam blog can get to 6, then something's wrong with PageRank.

We now resume our regularly scheduled service. I hope to pass my future Turing tests.

Sunday 27 December 2009

The usefulness of the 'Buy New Zealand Made' campaign

Both AntiDismal and NotPC have it wrong, says me. Both of them correctly note that the 'Buy New Zealand Made' campaign - an ad campaign put in place by Labour as a sop to the Greens - was completely useless in affecting folks' consumption decisions.

But that didn't make it useless.

The biggest problem with MMP is the costly bargains main parties have to make with support partners. The more efficient that main parties are at creating symbols to placate support parties that have zero real world effect, the better. Yes, they can cost a bit of money in the budget; NotPC says the Buy NZ campaign cost somewhere around $10 million. But that's insanely cheap compared to other anti-trade policies. I cannot imagine a better piece of policy that buys off the Greens and the nationalists while having trivial deadweight costs. Yeah, so every tax dollar has a deadweight cost somewhere around thirty cents. So the policy cost $13 million all up, pure loss. But compared to hiking tariffs or abandoning the free trade deal with China? Priceless.

Always remind yourself how much worse things could be.

Terrorists' objectives

Can we reject the null hypothesis that Osama's crew have agents inside the TSA and that their whole objective is to give these agents reasons to make travelers' lives hell?

Radley Balko:
Seems to me that what this, Flight 93, and the Richard Reid incident have shown us is that the best line of defense against airplane-based terrorism is us. Alert, aware, informed passengers.

TSA, on the other hand, equates hassle with safety. For all the crap they put us through, this guy still got some sort of explosive material on the plane from Amsterdam. He was stopped by law-abiding passengers. So TSA responds to all of this by . . . announcing plans to hassle law-abiding U.S. passengers even more.
Andrew Leigh:
Huh? Are attempts to bring down planes more serious in the last hour of flight than the first? And has anyone who writes these rules ever travelled with a baby or a child?

This of course follows the US TSA’s decision to waste thousands of passenger hours in requiring shoes to be removed for baggage screening, despite the fact that there is nothing you can hide in your shoes that you could not also hide in your underwear.
And, of course, Bruce Schneier, who, in a sane world, would have immediately been appointed head of the TSA DHS on Obama's inauguration:
And what sort of magical thinking is behind the rumored TSA rule about keeping passengers seated during the last hour of flight? Do we really think the terrorist won't think of blowing up their improvised explosive devices during the first hour of flight?
For years I've been saying this:
Only two things have made flying safer [since 9/11]: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.
This week, the second one worked over Detroit. Security succeeded.
So, is it then:
  1. The TSA are in it with the terrorists to create maximum inconvenience for travelers and augment the TSA budget
  2. The TSA are complete idiots
  3. There's nothing the TSA can really do, but idiots demand they do something and the only something that passengers can observe is how much they're being inconvenienced?
I lean towards the last one, with a slim chance of the first one.

Blogging continues to be very light over Christmas. On the plus side, the (unheated) pool is now cleaned and ready for the two months of service we can expect from it, given the weather here. Ira's been greatly enjoying runs into the ocean as well - he especially likes it when waves almost splash his face. We really need to learn to carry swim gear whenever we leave the house with him; odds are he'll lead us to the beach, and if Ira gets to the beach, chances are he'll want to get into the water. Last time, my shirt served as his towel....

Wednesday 23 December 2009

Mechanism design - academia

Presumably the government and the Tertiary Education Commission have figured out a clever mechanism design solution for the problem highlighted by Walker here. In short, University funding in New Zealand will soon be linked to student grades.

Of course, the equilibrium to that game, as Paul notes, is everyone gets an A+. The more respectable institutions would take longer to reach that equilibrium, but you can only watch the dodgy places rake in the cash for giving folks an A+ for taking a free CD-Rom for so long. The only workaround I can think of is moving back to purely external assessment, with all papers being graded offshore.

The Press article notes that while funding will initially be linked to student results, it'll eventually move to being linked to graduates' eventual jobs. I wonder how they'll track that. We don't even know where most of our undergrads wind up. What do they do with the large chunk of students who head overseas for their OE after finishing University?

This could all prove interesting. If it's the simple "first grades, then whether employed (or salary on employment)", the equilibrium is grade inflation plus refusing admission to anyone with a poor statistical chance of achieving decent employment outcomes.

Trigger threshold

Ok. Tyler recommended watching this review of The Phantom Menace, all 70 minutes of it. I know Tyler walks out of movies within minutes if they suck, and still I didn't watch follow the link. Then Chris Blattman also recommended it strongly. Ok, that's hit my threshold. I'm not disappointed. You should watch it too.

Tuesday 22 December 2009


I'd previously bemoaned the paucity of data on usage of the various welfare systems in New Zealand: the Domestic Purposes Benefit, the disability benefit, and so on. Long story short: they just don't have records sufficient for any aggregate analysis.

Today's Press has one anecdote, though: one gang-related family that's been on benefit for more than two decades and has received emergency assistance for swimming pool repairs on one of their many properties and for new tyres for their 2007 Chrysler. Farrar comments in horror. But Lindsay Mitchell sees the bigger picture: why can the Press get a full case history on one family when researchers are refused OIA requests on aggregate statistics? It feels a lot more like priming the public to accept some changes to the welfare system than honestly trying to assess the state of the system.

I'd emailed Paula Bennett's office after my last post, trying to get some of the kind of information that Lindsay has been trying to get -- I spend a week in my current policy issues class on poverty and welfare and wanted a better picture of the New Zealand stats. I suggested that if the problem were past records held in paper form, having some summer interns code the data would be pretty useful. Here's the reply I received from Hon. Ms. Bennett:
Dear Mr Crampton

Thank you for your email of 17 August 2009 regarding your recent request to the Ministry of Social Development for information about the lifetime uptake of benefits by beneficiaries.

You advise that you have been told that case records prior to 1996 are only held in paper format. I can advise that the Ministry's SWIFTI system did not exist before 1991. Because of the phased way that SWIFTI built to the functionality that it has today it does not contain full records of people who started their first spell on benefit prior to 1996.

Between the early 1980's and 1991 a much simpler electronic system was used. This system could track a person's interaction with the benefit system at an individual client file level, but could not collate duration information about all beneficiaries, and therefore could not provide 'average duration'.

Prior to the introduction of the first computer system client interactions were recorded in paper files. Most of these paper records will now have been destroyed in line with archiving legislation. For this reason interns completing a 'data entry' exercise would never be able to provide the information that you are seeking.

The Ministry can only really be certain about duration information that it holds for people aged in their early thirties or younger (i.e. those whose first interaction with the benefit system would have been after 1996 when full SWIFTT capture of information began).

I hope this clarifies the situation for you.
When I emailed MSD again asking particularly for data on recipients who entered the system since 1996, I received no reply and didn't have time to follow it up.

We really need better stats on which to base policy decisions. Anecdotes aren't enough.

Kanazawa on Tiger

I read Satoshi Kanazawa on Tiger Woods, and I cry a little that I never got the chance to have a beer with him during the three months that we overlapped at Canterbury (I didn't know he was here, and I was just settling in). When the staff club re-opens after Christmas, I will again kick Simon Kemp from the Psych department in the shins for letting Kanazawa go.
Bill Clinton became the President of the United States, unconsciously, indirectly, and ultimately, so that he could get laid. David Letterman became America’s favorite entertainer, unconsciously, indirectly, and ultimately, so that he could get laid. Tiger Woods became the most successful golfer in history, unconsciously, indirectly, and ultimately, so that he could get laid. It would be a tremendous evolutionary puzzle if these men, after spending their entire lives attaining the status and resources they attained, then didn’t have affairs. And their wives married them because they were the kind of men would could cheat on them.

Scientists are not in the business of making predictions for the future, at least not for the short run and not at the individual level, and, if they were, in the realm of human behavior, they would be wrong most of the time. But here’s a prediction that I can safely make for the year 2010.
During the course of the year 2010, there will be at least one sex scandal involving a notable politician, there will be at least one sex scandal involving a notable athlete, and there will be at least one sex scandal involving other celebrities. And the politicians, athletes, and celebrities involved will all be men.
Yes, this is the most banal prediction that anyone can make. (I also predict that there will be lots of snow in Buffalo, NY, this winter.) But do me a favor: If you are going to complain that my prediction is banal, which it is, then please don’t act surprised when it comes true, which it inevitably will. A statement cannot simultaneously be banal and surprising (let alone outrageous and disappointing) at the same time.

If, on the other hand, I turn out to be wrong in my prediction, I will hang up my hat as an evolutionary psychologist, and, after the last of the monkeys fly out of my ass, become a social constructionist feminist. Get back to me in January 2011.
I like folks who have confidence in their predictions and are willing to put things on the line.

Editorial shenanigans

Recall the scraps between Liebowitz and Levitt over Liebowitz's comment on the Oberholzer-Gee piece in the JPE?

The release of the climate emails from Hadley have allowed climate scientists Douglass and Christy to figure out just why their paper on divergences between climate model predictions and tropospheric observations took so long to come out and why it was followed immediately by an extensive rebuttal by some of the prominent pro-warming folks.

Not pretty. It looks like the editors gave the page proofs to the other side, before publication, then held up publication of the original 'till the rebuttal was ready, rushing the rebuttal through the process without notifying the authors of the original piece. When the rebuttal folks cited their rebuttal (forthcoming) in another piece in Nature Geosciences, they then refused to give a copy of it to the authors of the original article on request despite a requirement in Nature that sources be available.

HT: Motl.

Monday 21 December 2009

Year end clearance sale: event derivatives

iPredict has a bunch of contracts that close 1 January 2010: 12 days from now. Here are some with standing buy orders that seem incredibly likely to resolve at 0 or 1.
  1. Foreshore and Seabed Act (2004) to be repealed in 2009: bids from $0.0114 down. No way this can happen with the number of sitting days left in Parliament for the year, not with zero notice.

  2. NZ OCR to drop below (2.5%, 2%, 1.5%, 1%) in 2009; note that there are no scheduled OCR revisions between now and 28 January, so it would have to be an extraordinary thing for RBNZ to step in with an unscheduled drop. Bids ranging downwards from $0.0121

Recall that even a 1% return over 12 days is ... rather larger than that as an annualized return.

These below are less sure things, but still seem overpriced with 12 days to go:
  1. NZX50 to close 250 points lower than it opens on any day in 2009: bids from $0.0192 down.

  2. Winston Peters to remain sole leader of NZ First in 2009: asks from $0.9832 up

  3. Peters to share leadership of NZ First in 2009: bids from $0.0205 down

  4. Phil Goff to be replaced as Labour leader in 2009: bids from $0.0148 down

  5. Annette King to be replaced as Labour deputy leader in 2009: bids from $0.0168 down

  6. Jim Anderton to announce in 2009 he will not stand in next election: bids from $0.0249 down (possible as part of a Christmas letter, I'd reckon)

  7. Second Minister to depart in 2009: bids from $0.018 down

  8. National/Maori Party agreement to be terminated in 2009: bids from $0.0158 down

  9. National/ACT agreement to be terminated in 2009: bids from $0.013 down

  10. Mugabe to lose Zimbabwe Presidency in 2009: bids from $0.018 down (will he die in the next two weeks? Odds seem less than 1.8%

  11. North Korea to fire a missile at a foreign country in 2009: bids from $0.0192 down

  12. Ahmadinejad to lose Iranian leadership in 2009: bids from $0.0205 down

  13. NZX50 to close below (2250, 2000, 1750, 1500) on any day in 2009 (NZX50 currently at
    3150): bids ranging downwards from $0.0180 depending on contract

  14. S&P 500 to close below (650, 600, 550, 500) on any day in 2009; index currently at 1100. Bids ranging downwards from $0.018.

If you've free cash sitting around in your iPredict account and it's looking for a home, or if you've room to deposit more cash into your iPredict account, and you don't want to have to worry too much about sitting and watching your stocks over the holidays (so the option value of having cash in the account in case of big bargains showing up is low), then have a gander....

Wanna bet?

Forcing a bet can work to induce rationality. Someone makes a claim you think is false, offer a bet on it. Sometimes you'll get a clean agreement on odds and terms. But sometimes folks wishing to hold on to preferred beliefs will state a sufficiently difficult list of auxiliary conditions to make the claim untestable, and consequently unbettable.

Chris Blattman, a Yale political scientist doing field work in Liberia, reports on a Liberian hunter who claimed to be able to transform into any animal.
Last Liberia trip, my survey staff tried to convince me that Liberian hunters have the power to transform themselves into animals. I bet them otherwise, and they pledged to prove it the next time I came to Liberia.

Staff excitement rose after a reader pointed out there’s a million dollar prize for proof of the supernatural.

Well here we are.

A more or less trustworthy and credible staff member says he has located someone, and promises I can meet this amazing man Saturday, where he will turn into an animal.

What animal? “Dog, hog, chimp, anything” was the text reply. And yes, he says, he has seen it himself.
Blattman then updates:
In the end, it turns out he can’t perform the full transformation in the city, only in forested regions. We offered to drive out of the city, but it seems only in his home county of Nimba can he do so. Nimba will have to wait for my next trip (we have, in fact, a project there) but you’ll forgive me if I haven’t reserved judgment.
Hey, I can fly like Superman too. But only on dates that are prime numbers and only if the wind is right.

Blattman goes on to point out some of the rather unpleasant consequences of superstitious beliefs. A fun one:
Just today a senior diplomat bemoaned a recent by-election. The popular, qualified candidate lost to a less scrupulous one whose entire campaign aimed at convincing the populace that his opponent would die from evil spirits if elected. It seems to have won him the election.
I do work on political ignorance; I should stop complaining about things in NZ and the US.

It's also more than a little worrying that Blattman's field staff, presumably among the more educated folks, are taken in by claims of mystical powers.

Ayn Rand villains

Caplan had to look back to the 30s and 40s to find real world examples of Randian villains.

The most recent Monbiot column does have a certain Ellsworth Toohey feel to it....
This is bigger than climate change. It is a battle to redefine humanity.

It's hard for a species used to ever-expanding frontiers, but survival depends on accepting we live within limits.

The summit's premise is that the age of heroism is over. We have entered the age of accommodation. No longer may we live without restraint. No longer may we swing our fists regardless of whose nose might be in the way. In everything we do we must now be mindful of the lives of others, cautious, constrained, meticulous. We may no longer live in the moment, as if there were no tomorrow.

Friday 18 December 2009

Satire or not? [updated]

Update 2 PM: I'd updated to 95% chance spoof on noticing the "Santa studies" line; we now have confirmation that it is indeed pure spoof. Email copied at the end.

If I had to bet, I'd say 75% chance that the healthist anti-Santa article is satire.
Infectious disease vector

A quick perusal through the Victorian infectious diseases surveillance records shows no notifications of infectious disease outbreaks associated with kissing Santa. Although there were no cases of infectious mononucleosis ("kissing disease") associated with Santa, there have been numerous foodborne viral and salmonella outbreaks associated with Christmas parties. Santa was not named as a suspected point source.

Surveillance programmes do not routinely collect data on Santa exposure but, temporally at least, Santa is potentially a point source for infectious diseases outbreaks. The grey literature documents clear basic hygiene issues arising from interactions with Santa. One survey found that "Santa is sneezed or coughed on up to 10 times a day."13 The potential for Santa in his asymptomatic phase to propagate an infectious disease is clear. Unsuspecting little Johnny gets to sit on Santa’s lap, but as well as his present he gets H1N1 influenza. Santa continues on his merry way and gives the present to a few more 100 kids before coming down with influenza himself. This then becomes a contact tracer’s nightmare.


Santa studies is a developing field in public health, and currently there is a disappointing lack of rigorous research on the effect of Santa on public health. More targeted research is required before authorities might take action to regulate Santa’s activities. This research should particularly focus on the ability of Santa to encourage unhealthy behaviour; the use of Santa in advertising to kids; and the infectious disease risk of Santa impersonators.

We need to be aware that Santa has an ability to influence people, and especially children, towards unhealthy behaviour. Given Santa’s universal appeal, and reasoning from a population health perspective, Santa needs to affect health by only 0.1% to damage millions of lives. We propose a new image for Santa to ensure that his influence on public health is a positive one.
It starts off sounding standard healthist, but then goes far enough over the top that it's gotta be satire. It is satire, right? It's so hard to tell these days. A piece 40 years ago advocating banning smoking in public outdoor places would have been seen as satire too though.

Place your votes in the comments if you like. I'll try emailing the author to find out.

Update 2PM: The author replies (most of which I'd guess is boilerplate after fielding many many queries):
Hi Eric,

Most of the 'Santa- A public Health Pariah' article is meant to be tongue-in-cheek. It's a Christmas spoof. It's supposed to be spreading a bit of Christmas cheer, but with a tinge of seriousness to provoke a bit of healthy Christmas dinner table conversation. The BMJ Christmas edition is a special edition with much humour.

Unfortunately, the article has spread like wildfire but it has lost a bit of the Christmas cheer element. I describe the article like belief in Santa. There is a little bit of truth and every person has to decide how much they believe. The media perhaps believed a little too much...probably because they had only read media release and not the article. The BMJ article is clearly ludicrous.

I am a Santa believer and lover! I have donned the red and white garb a number of times to bring cheer at school concerts in rural Victoria. I believe in the true meaning of Santa. The true Santa, Saint Nicholas, was a very generous man who gave of all his wealth to bless others who were in need. This was a reflection of one of the greatest gifts given to humanity: the baby Jesus.

We need to reclaim Christmas for the beauty of giving and loving. It is definitely not about alcohol companies and coke cola exploiting Santa's selling power! Santa was never accepted the job as chief sales consultant for a tobacco company.

I received much correspondence accusing me of wasting 10 years of university education and bringing the academic institution to shame! To clarify I am not a Santa researcher. The article was written in my spare time for a bit of comic relief. My heart lies in doing charity work in India and research in partnership with the Nossal Institute of Global Health. Interestingly this reflects the work of true St Nic. We help to bring the gift of improved health to people in need. It would be great if the media were to care as much about my 'real' work as about a fantastical Santa article.

Ho ho ho! Merry Christmas!
Nathan (AKA Scrooge)

Drug reimportation

Jeffrey Miron makes the case against the American ban on re-importation of prescription drugs.

He doesn't note that, in the absence of the American ban, other countries would likely work pretty hard to keep Americans from importing their drugs.

Basically, most countries, New Zealand and Canada included, massively free ride on American investment in drug innovation. The pharmaceutical companies recoup their investments by selling at high cost in the United States, but other countries with block buying agencies run by governments negotiate lower prices. We'd expect this in price discrimination models where countries differ in income and the marginal cost of production is much lower than the average cost.

But successful price discrimination strategies require an absence of arbitrage. If the US were to drop its ban on re-importing drugs from Canada, the Canadians would have strong incentive to keep Americans from buying large quantities of drugs for re-import lest the American companies decide the Canadian market not really worth the hassle, or at least not a market that gets a discount relative to US prices. Consequently there's no need for the US to bear the costs of enforcing such a ban. At worst, US drug companies stop selling at a discount to foreigners. Things get more complicated if the foreign threat is to eliminate IP on drugs in retaliation, but that seems pretty unlikely given how folks seem to be jumping to sign on to insanely strict levels of IP protection.

Killing in the name of Frosty

HefeVice points to this piece of Christmas awesomeness. I'm not a Christmas guy: far more the grinch. But anybody that can mash up Rage Against the Machine with Frosty the Snowman in a sax quartet is awesome.

The Adelaide Sax Pack has more tunes up at MySpace. Enjoy! Hope they come to Christchurch....

HefeVice also notes that the healthists are now campaigning against Santa due to his excess drinking and eating on his route. And folks call me grinchy....

Thursday 17 December 2009

Courts get one right

Ex-New Zealand police officer Nathan Connolly, who extorted free services from a prostitute by threatening her a thousand dollars in traffic fines should she not provide him free service, has been sent to prison for two years.

We rarely hear of police trying to extort free accounting or mechanical services. But prostitutes traditionally have been vulnerable to police extortion, because of their precarious legal position. But prostitution is legal in New Zealand, and so the victim of police extortion was able to access legal mechanisms to enforce her rights.

Hoorah to the best piece of legislation to come of the prior Labour government!

Henninger on Science

This worries me too:
Surely there must have been serious men and women in the hard sciences who at some point worried that their colleagues in the global warming movement were putting at risk the credibility of everyone in science. The nature of that risk has been twofold: First, that the claims of the climate scientists might buckle beneath the weight of their breathtaking complexity. Second, that the crudeness of modern politics, once in motion, would trample the traditions and culture of science to achieve its own policy goals. With the scandal at the East Anglia Climate Research Unit, both have happened at once.

I don't think most scientists appreciate what has hit them. This isn't only about the credibility of global warming. For years, global warming and its advocates have been the public face of hard science. Most people could not name three other subjects they would associate with the work of serious scientists. This was it. The public was told repeatedly that something called "the scientific community" had affirmed the science beneath this inquiry. A Nobel Prize was bestowed (on a politician).

Global warming enlisted the collective reputation of science. Because "science" said so, all the world was about to undertake a vast reordering of human behavior at almost unimaginable financial cost. Not every day does the work of scientists lead to galactic events simply called Kyoto or Copenhagen. At least not since the Manhattan Project.
If the new ethos is that "close-enough" science is now sufficient to achieve political goals, serious scientists should be under no illusion that politicians will press-gang them into service for future agendas. Everyone working in science, no matter their politics, has an stake in cleaning up the mess revealed by the East Anglia emails. Science is on the credibility bubble. If it pops, centuries of what we understand to be the role of science go with it.

The Gnomes of Canterbury

It's good to be at a place with a good history.

I checked around a bit this morning for where the term "The Gnomes of Canterbury" originated. Best I can reckon, it's this Bruce Jesson article from Auckland Metro, August 1986. [Update 2019: linkrot set in on the prior link. This should work now.]

Jesson first complains that Treasury and the Reserve Bank have taken too strong a hold of the policy process in Wellington (the reforms of the mid-1980s)
Cabinet as a whole is overwhelmed by the expertise, volume and sense of certainty of the economic advice. Most ministers have been reduced to nonentities. And the people of real power in the inner circles of government are public servants like Graham Scott (Treasury) and Rod Deane (formerly of the Reserve Bank, now State Services Commission).
He then lists the formidable opponents of the "Treasury View", primarily centered at Victoria University but also at Massey and Auckland. Treasury supporters, on the other hand, are found at one place above all:
Support for the Treasury approach is concentrated at Canterbury where Professor Richard Manning, Labour Party adviser and Reserve Bank appointee, is the intellectual authority. Many Treasury officials are Canterbury graduates, which means that government policies are dominated by the thinking of a particular university department.
The article is consequently titled "The Gnomes of Canterbury". My currently silent co-blogger is of course a student of Manning's. As we celebrated graduation here this week, Hoorah the Gnomes of Canterbury, past, present and future!

Update: It's difficult to imagine how "gnome" could be given as a term of opprobium. Consider the following:
  • Favoured character class either wizard (illusionist) or bard

  • Their intricate society is shaped by their shared love of the arts, pranks, and longevity

  • Practical jokes are perceived as contests of wit and skill

  • Gnomes' hats indicate their level and place of education; they rarely go hatless

  • They seem to favour a Montessori style early education

  • Courtship comprises a series of practical jokes with the intended being the target

  • The burgomaster (village leader) gains the position by virtue of being the wittiest among the villagers during a competition to most improve the lives of co-villagers

My current D&D character started as a human but is slowly turning into some kind of dragon. I think my next one will be a gnome.

Wednesday 16 December 2009

Failing the giggle test

British Prime Minister Gordon Brown says failure to reach a deal at the Copenhagen climate conference may trigger an economic disaster equivalent to the combined effects of the two world wars and the Great Depression.
Today's headline from Radio New Zealand.

Any of the folks talking about a twenty percent drop in GDP are talking about projections a century from now relative to a baseline where global warming didn't exist. They're not talking about the Great Depression tomorrow. And, you have to weigh the costs of that loss a century from now against the reduction in economic growth you'd have today if we implemented very costly measures against warming today. If you set the discount rate to zero, or if you care a lot about guarding against the lower chance of the worst outcome, then spending more now makes sense; otherwise, it doesn't.

But Brown's presenting it as though the policy alternative is costless and the costs of inaction are incurred very soon. Given that the mean expected economic costs of global warming at reasonable discount rates aren't that far from the mean expected economic costs of implementing carbon mitigation regimes, you could just as easily predict economic disaster from a carbon tax. Small reductions in economic growth rates have large cumulative effects....

Causality anyone? [updated]

[Updated below]
The New Zealand press is all a-twitter with reporting on the latest study by the folks at the University of Otago finding that marriage is good for mental health. Neither the stories nor the University's press release mentions the word causality.

There's one simple question that ought to be required for any journalist interviewing any social scientist on any issue like this: "How did you address causality?" It's a simple question. If the researcher says "Oh, we used a panel design to get within-subject effects" or "Oh, we instrumented by using...", that's a great start! If not, all you've got is correlation.

Digging up the paper, we find that they've run a hazard model on the likelihood of first onset of each of several mental illnesses. Every person-year is an observation, where each person in the survey is asked to remember back for each prior year and state whether they've had any of a list of mental illnesses. Single and divorced people are more likely to start having their first instance of a mental illness than currently married people. Or, rather, persons of any current marital status are more likely to report having had their first instance of a particular mental illness while they were single or divorced or during their second marriage than while in a first marriage.

Of course, if folks in the dating market are saying "I don't want to marry her because she seems likely to be crazy" or "I like him, he seems really stable", or "I've gotta divorce her because she's showing signs of going nuts and I can't deal with the hassles I can see coming down the track", then causality is entirely wrong: marriage doesn't prevent mental illness, rather, folks are more likely to marry and less likely to divorce folks who seem less likely to become mentally ill. All we need is potential partners to be roughly right in their guesses, and it's then screening. Male-female differences are then just measures of how able females and males are to detect (prospective) partners' mental stability crossed with how much they care about it.

In the paper's conclusion:
Finally, the limitations to the control of selection bias also need to be acknowledged. The survival analysis that we employed reduces the effects of selection bias by excluding situations where the prior existence of the focal disorder has an influence either on reduced chances of becoming married or increased chances of marriage dissolution. However, it cannot eliminate the possible influence of factors that may both decrease the likelihood of getting married and increase the likelihood of mental disorder onset, such as personality or history of sexual abuse.[emphasis added] The fact that we found that marriage was associated with reduced onset of disorders that typically occur well before marriage (the phobias), is suggestive of some residual selection bias of this sort, though this would only apply to the contrast between the married and the never married.
Yes, using first onset timing helps. But if screening happens prior to first onset by folks looking prospectively and being on average right, then there's still a causality issue.

Worse, it's unclear in the paper whether each hazard regression has "the first onset of this mental illness" or "the first onset of this mental illness, which is the first mental illness experienced by the respondent" as the dependent variable. If the latter, then the selection bias is far worse: if the likelihood of experiencing any mental illness is increased by having experienced some other mental illness, and if any mental illness reduces the probability of marriage and increases the probability of divorce, then a method that looks at each illness separately without considering the selection effects induced by comorbid prior mental illnesses... would have problems.

Just ask yourself: when you've been dating, has the relative mental stability of the potential partner made you more likely to want to keep seeing them? Sure, we can get things wrong, and sure, some folks who seem really stable can go on to develop mental illness. I'm sure lots of folks can tell stories about a partner who just snapped out of nowhere. But if on average over lots of people folks guess these things about right, then there's still a big causality problem in the paper.

None of the news reports even asked about causality. I'm not sure a lot more could have been done about causality in the paper given the data. But I'd certainly be nervous about staking bold causality claims on it, and all of the journalists are suggesting the relationship is causal.

I sometimes wonder whether a one day session for journalists on the basics of statistics, inference and economics would be worthwhile or if it would only attract the folks who already know about it. Nothing controversial -- just the stuff on which the vast majority of economists and statisticians agree. Like the difference between percentages and percentage points, nominal and real, cumulative effects of percentage changes over time, external versus internal costs, correlation and causation....

Update: Dr. Scott kindly reports that survey respondents code the frequency of various symptoms of mental illness, looking back retrospectively, then an algorithm determines whether a set of symptoms and their frequency adds up to an instance of mental illness. The hazard is the first onset of the focal disorder (each disorder taken in turn) regardless of prior onsets of other disorders. I'm still then more than a bit nervous about selection driving things: if you're less likely to get married (more likely to divorce) if you've exhibited one disorder (or symptoms thereof) and if the likelihood of another disorder is increased by having exhibited a prior one, then the hazard of any particular disorder's onset is increased by being single because you're less likely to have selected into marriage.

ACC Rates

If, as a creative artist, I earned more than $1500 outside of my normal job, I'd be liable to ACC taxes of 2.26% on all such earnings, or so ACC tells me today. I must ensure that such earnings not fall anywhere in the range $1450 to $1800 this year.

Does a rate of 2.26% really seem actuarily fair for on the job accidents for "Creative artists, musicians, writers and performers"? Note that private insurance markets charge less than 1% for income protection insurance, and that they charge men less than women (as women are far more likely to make claims based on mental health disorders).

Where's my opt-out switch?

There's a class of arguments that run as follows:
If I allow you to do X, and X turns out badly, I cannot credibly commit to letting you suffer the consequences. Therefore, your ability to do X must be regulated or prohibited.
And so we can't opt-out of public health systems or workplace accident insurance because the state cannot credibly commit to letting us suffer the downside consequences of accepting risk; we may soon prevent banks from getting "too big" because the state can't help itself from bailing them out (why not car manufacturers too in that case?). In this kind of world, a state that didn't want to agglomerate power to itself would be working hard to establish a credible reputation for letting things suffer downside costs of risk so that it wouldn't be put into the "can't credibly commit" situation. Instead, governments seem to be moving to bail out or compensate for any adverse life or business outcome and folks have come to expect and demand such bail-outs.

If I could convince you that, were you to suffer kidney failure, I'd be utterly unable to prevent myself from giving you a kidney, does that then give me the right to heavily regulate your diet and exercise regime to keep you from needing my kidney? Why should your rights be contingent on my self-control problems?

Tuesday 15 December 2009

Cheap shots at Don Cherry

Today's National Post has a healthist condemning Don Cherry, one of the elder gods of hockey, for a hockey culture that encourages hits to the head and concussions. Nothing could be farther from the truth. Cherry has consistently argued for a physical form of the game, but one that's sensible: no hits to the head, no cross-checking from behind, and no stick play. So unless he's changed his tune a lot since I left Canada, this is just a cheap shot.

Cherry has previously argued that players wearing face shields are a danger to others as they pay less attention to keeping their sticks down on the ice. One of my honours students a year or so ago found that Cherry was right: players wearing visors were more likely to draw stick related penalties than were other players, all else equal. I'm hoping to get time this coming sabbatical to work up the results with Tim a bit more formally and get the paper out.

Monday 14 December 2009

Growthgate and Climategate

William Easterly notes parallels between climate research and research on economic growth.
There were three steps in the the great History of Evolving Cluelessness:
  1. Economists spent the past two decades trying every possible growth determinant in sight. They found evidence for 145 different variables (according to an article published in 2005). That was a bit too many in a sample of only about one hundred countries. What was happening is there would be evidence for Determinants A, B, C, and D when tried one at a time to explain growth. But the evidence for A disappeared when you also controlled for some combination of B, C, and D, and/or vice versa. (Interestingly enough, foreign aid never even merited inclusion in the list of 145 variables.)

  2. The Columbia economist Xavier Sala-i-Martin and co-authors ran millions of regressions on all possible combinations of 7 variables out of the many possible determinants of growth. Skipping a lot of technical detail, they essentially averaged out the millions of regressions to see which determinants had evidence for them in most regressions. There was hope: some were robust! For example, the idea that malaria prevalence hinders growth found consistent support.

  3. This new paper by Ciccone and Jarocinski found that every time the growth data are revised, or if the sample is changed to another equally plausible one, the results vanish on the “robust” variables and new “robust” variables appear. Goodbye, malaria, hello, democracy. Except the new “robust” determinants are no longer believable if minor differences between equally plausible samples changes what is robust. So nothing is robust.
There are two possible ways to describe what had happened over the past two decades:
  1. The growth research was at least partially fraudulent, in that we researchers were searching among many different econometric exercises till we got the “determinants of growth” we wanted all along.

  2. There was a good faith effort by us researchers to test different theories of growth, which led to some results. We didn’t realize until later that these results were not robust.
Description (1) would be a “GrowthGate,” but since so many people would be guilty (of “data mining”), and since we really can’t tell for any individual study or researcher whether it was (1) or (2), “GrowthGate” never became a story.
It's rather worrying if the Sala-i-Martin variables prove non-robust across new iterations of the Penn World Tables. Minor errors in data seem to blow the technique apart.

Genetic distance in war and economics

It turns out that folks kinda hate their genetic neighbours.

Enrico Spolaore was one of the keynote speakers at the Australasian Public Choice Society Meetings in Melbourne last week. I'd not before seen his work on genetic distance, but it's rather interesting.

Genetic distance measures the number of generations back you have to go before two populations share common ancestors. So if two populations diverged only a very short time ago, like the Danes and the English, their measured genetic distance is short; if they diverged a very very long time ago, like the Australian aborigines and the Mbuti Pygmies of Africa, their measured distance is long. While this is related to geographical distance, it's far from perfectly correlated: Canada's Inuit are closer to Tibetans than they are to any of the other Amerindians; the English are closer to the northern Indians than they are to the Lapps (Finish); the Mongols are closer to the Japanese than they are to the Chinese; the Indians of south east India are closer to the Italians than they are to the Thai people or the South Chinese.

Spoloare and Wacziarg find that this measure of genetic distance predicts whether two populations will go to war, after controlling for the usual set of determinants of conflict like geographical proximity, shared borders, income differences, religion, language, and so on. All else equal, the more two populations are genetically proximate, the more likely they are to go to war and the less likely they are to vote together at the UN. If current patterns of war have affected measured genetic distance, then causality may be wrong, but they use genetic distance as of year 1500 as an instrument.

I'd worried that results might be drawn from a few places that have been strategically important going back well before 1500. For example, if the bridge from Africa to Asia Minor via Sinai and Israel has been strategically important for thousands of years and if similar populations have lived around there for a long time, then the correlation of genetic distance and conflict could have things the wrong way round: frequent conflicts in strategic regions bring genetic mixing, and if the regions' strategic importance continues from well prior to 1500 to present, then it wouldn't be that folks want to fight with their genetic neighbours, but folks who fight a lot become genetic neighbours. Controlling just for having a common border or just for geographical distance wouldn't quite cut it. But they find that the effect also holds for country pairs that do not share a border.

Why might we fight more with our nearer than our more distant cousins? Spolaore suggests that genetic closeness makes it more likely that we'd be in conflict over rivalrous resources. I wonder whether we couldn't imagine a pleistocene explanation: if there's a fertility advantage to outbreeding but not too far (the sweetspot between inbreeding depression and outbreeding depression), then our ancestors 90,000 generations back on the Savannah who raided more closely related neighbours would have had a slight advantage over those who raided groups too genetically distant. Run the mechanism for 90,000 generations, and you've a population that's keyed to want to raid folks who are more like them.

In the May QJE, Spolaore and Wacziarg found that genetic distance from the United States explains cross country income differences after correcting for geographical distance, climate, transportation costs, and measures of social distance (historical, religious, linguistic). Again, they argue that genetic distance may be the best measure of "slowly changing genealogically transmitted characteristics, including habits and customs" - the bits of culture we can't adequately otherwise measure. That's certainly possible, and cuts against my evolutionary biology explanation above, mostly because it's hard to come up with an ev bio explanation of why genetic distance from the US would correlate with income differences. The best explanation I'd have would be that it's proxying for differences in average IQ: also somewhat genetic, but at some of the more depressed ends of the scale almost certainly highly environmentally influenced). But that would be a bit of a wash: there are genetically distant places above the US (Hong Kong) and far below the US (Equatorial Guinea) in reported average national IQ. Spolaore's culture explanation seems the more plausible.

Spolaore gave one of the best plenary addresses I've ever seen. If you get a chance to see him give a talk, go.

Sunday 13 December 2009

DeLong, then and now

DeLong and Lang's 1992 "Are all economic hypotheses false?" was a very nice contribution. Long story short: given the ease with which researchers can pick variables to ensure their chosen specification has significant results, and the near impossibility of publishing things that show statistically insignificant results, all published standard errors in economics (or any discipline where this happens) are wrong: they're all biased downwards, and a proper accounting for publication and researcher bias would have a hard time rejecting the null that all of them are insignificant.

And so all the recent shenanigans at Hadley had me thinking of DeLong and Lang.

Today DeLong approvingly cites Mark Kleiman.
Assume some climate model predicts that... temperature would rise 3° C by 2100. If the model were very accurate and precise, that might be 3°± 1°. If the mechanisms involved remain obscure and the data unclear--as is the case today – that might be 3°± 5°.... Given how bad a 3° increase would likely be, if we knew for sure that would be the outcome in the face of inaction there would be a strong agument for making big and expensive policy changes to prevent it from happening.
But following DeLong and Lang, it isn't that the confidence interval is just wider, it's that our current uncertainty (coming from Hadley) is to what extent the estimates have been picked from the top rather than the middle of the interval. Are all climate hypotheses false?

Thursday 10 December 2009

Wind and water are complements

Wind power can make sense if you also have a lot of hydroelectric power generation. Wind is of course highly variable and somewhat unpredictable, and the grid requires realtime constant matching of demand and supply to maintain stability. It's much easier to open or close the sluices a bit depending on wind than it is to ramp up or down a thermal plant.

If you don't have the flexibility of a hydroelectric system...well, here's some evidence from Europe, from Motl:
Every year, a huge excess of wind-generated electricity from Northern Germany causes problems to the grids in Czechia, Poland, Austria, Slovenia, the Netherlands, Belgium, and Switzerland.

A year ago, the wind was really strong and the first problems occurred. So they established a warning system. The problems are repeating in 2009, too. For example, it was planned for the last week that there would be a total of 130 MW of electricity flowing from Czechia to Germany. However, the actual budget was 1300 MW in the opposite direction. The balance was almost 1500 MW different than planned.

Mr Petr Zeman, the CEO of the Czech Power Grid (ČEPS), explained that they have survived so far. In his opinion, the problems are caused by the uncoordinated development of the wind turbines in Germany. They have stated that 20% of the electricity should come from renewable sources but these slovens no longer care what it does with the grids.

It is clear to Mr Zeman that if Germany were not connected to the rest of Europe, it wouldn't be able to survive these moments. The grids could be built to sustain such irregularities. However, it takes something like 10 years to build new power lines (which includes 7 years of the hugely complex EU paperwork).

The blackouts are being avoided by rather ad hoc methods of turning individual stations on and off in an internationally semi-coordinated and semi-predicted fashion. However, the chaotic description makes it likely that the system may collapse at some moment. The tasks for the regulation will be increasingly difficult as Germany wants to inflate the current 25 GW of pinwheels to 50 GW of pinwheels.
A commenter at Motl's blog notes that coal and oil thermal plants that have to stand down because of wind have to be put into "hot standby": they're still burning fuel to keep the plant's temperature up, but they're not generating electricity.

Sounds like a great deal: pay for wind turbines, keep paying for fuel for the oil and coal plants, and get the added bonus of grid instability.

Wednesday 9 December 2009

I'm a creative artist

In response to my email of a while back, ACC has decided to classify me as:
92420 Creative Artists, Musicians, Writers and Performers
I've always thought that economics was best placed in the Arts rather than Commerce anyway.

Still no word on what the earnings threshold is for having to start paying a separate ACC levy.

A friend tells me that he had a similar experience a while back, though he was above the reporting threshold. On calling ACC to confirm that he wasn't involved in manufacturing (the default category, it seems), they asked what he was involved in. He asked what's the cheapest category. They said "data entry". He said "data entry". And they were happy with that.

If I ever wind up actually having an invoice, I may petition to be reclassified as a data entry guy. Transcribing results from Stata into Excel counts, right? (and, no, Outreg won't work easily for what I'm trying to do...)

Come to think of it, if data entry has the lowest risk, what does that say about theories of low status leading to stress and bad health? If depression is work-related, and ACC covers for mental health issues related to work.... We have good reason to expect that ACC's premia aren't fully risk adjusted, but I don't think anybody's claimed they have the rank order wrong, just that it's too compressed. Hmm.

Data entry...the high school guidance counselor, on seeing the results of my standardized tests around the 10th grade, in which my "clerical speed and accuracy" score had me at the 100th percentile (none of the other bits at all shabby, save mechanical reasoning, which was only around 75th and was only that good because I kept thinking back to playing with the Lego Technix set...), suggested I might wish to become a clerk. Transcribing Stata results makes me wonder whether she wound up being right after all about actual outcomes....

Ok, back to the clerical work....

Masnick on Music

Mike Masnick, who earlier put together the rather nice explanation of Trent Reznor's business strategy, continues to be one of the most sensible analysts of the current state of the music industry. Today he writes:
...selling music is just not a good business model, but it doesn't mean there aren't good, music business models. It's just that selling music isn't a very good one. Instead, you need to learn to use the music (which still needs to be good, and is still the central reason why these other business models work) to sell something else -- something scarce, which can't easily be copied. That can be attention, access, time, creative ability, cool physical products, whatever. All of those things are made more valuable the more popular the music is, and you can build all sorts of powerful and immensely profitable businesses once you recognize that.

But if you still think that selling the music or making money directly from the music has to be at the "center" of any music business model, you're shutting yourself off to the largest opportunities out there. But, the thing is, music has always been a product that makes something else more valuable. While there was some disagreement on the panel from someone about how record stores were profitable in the 70s, that's a case where the music was making the vinyl (and later, plastic) more valuable. Today, it makes iPods more valuable. As the big box retailers know, it acts as a loss leader to bring people in to buy higher margin goods. Music is great at selling other, higher margin things. If you ignore that in the music business model, you're missing the big opportunity.

This isn't to downplay the importance of music, or say that the quality of music doesn't matter. It absolutely does. But the music is not the scarcity, and you don't make money off of selling something that's abundant. You use the abundance to figure out what other scarce goods it makes more valuable and you sell those.

Tuesday 8 December 2009

Reasons to distrust petitions

The girl at 3:00 who winds up signing...sigh.

Some folks turn him down, some because they know hyperinflation is a bad idea, some because they don't want the hassle of dealing with him. But most folks sign the petition, supporting an increase in inflation to 100% this year and 100% for each of five years subsequently. I wonder how many signatures he could get if he spent a few more days at it.

HT: Brad Taylor
Update: original source site here.

Monday 7 December 2009

Templeton Essays

My paper inbox today has the announcement of the 2010 Sir John M. Templeton Fellowships Essay Contest. This year's topic:
"Everyone wants to live at the expense of the state. They forget the state wants to live at the expense of everyone." - Frederic Bastiat (1801 - 1850).

Assuming Bastiat is correct, what ideas or reforms could be developed that would make people better aware that government wants to live at their expense?
My student Brad Taylor won the student division of last year's contest; I strongly encourage folks who did well in my public choice classes to enter the contest.

Sunday 6 December 2009

Talking sense on recycling

My back-of-the-envelope calculation for Christchurch, back when we were paying $1.20 per black bag for garbage pick up but the city completely subsidized recycling, was that the city paid roughly twice as much per tonne for disposal of recycling after counting the money they made from on-selling the recycling bits that were of any value: the most conservative estimates I could make had regular trash costing about $42/tonne and recycling about $75/tonne; midpoint estimates were more like $31/tonne on landfill and $110/tonne on recycling (depending on how you want to allocated fixed costs across disposal types given how the City Council reports spending on refuse).

We've since moved to a bin system where we don't pay directly either for landfill or recycling, so the price disparity will likely have narrowed somewhat, mostly by increasing the amount by which the Council subsidizes landfill use from rates. I wouldn't say that paying for trash pickup from rates rather than paying per piece is inefficient: the best evidence suggests that the transactions costs of running a per-unit payment system outweigh any distortions caused by lump-sum pricing. But it will make recycling look relatively less costly.

Kevin Libin in the National Post lays out some hard facts on recycling.
“People say you can’t recycle too much. It turns out you can,” says Mr. Porter, president of the environmental consulting firm, the Waste Policy Center, near Washington, D.C. “If you spend enough money, you can recycle anything. That doesn’t mean you should.”

A 2003 study by Enviros Environmental Consultants UK found that “from a global warming perspective, there is limited environmental benefit to using recycled glass” but continuing with the exercise of recycling was “an important part of the UK meeting its overall glass recycling targets.” That is, so politicians could meet their set goals, even if there was no environmental point to it.


San Francisco’s Department of Waste recently calculated it paid $4,000 a tonne to recycle plastic bags. Its resale price for the recycled product? $32. “Nobody wants it. There’s no value. It doesn’t make sense,” says Joseph Gho, CEO of EPI Environmental Products Inc., a Vancouver manufacturer of biodegradable plastics. “Besides the financial, the economic cost, you’ve got the environmental cost” of recycling unwanted material. “The trucks running out there, burning fuel … you have to use energy, you’ve got CO2 emissions.”

That’s why curbside recycling requires, wherever it’s implemented, millions of tax dollars to stay afloat: the inputs required are greater than the savings. Even in New York City, where area land is some of the most expensive on the continent, it costs $240 to deal with a ton of recyclables, compared to the $130 a ton of landfills, says Angela Logomasini, Director of Risk and Environmental Policy at Washington, D.C.’s Competitive Enterprise Institute.


A 2000 study by the London-based environmental group Friends of the Earth found that collecting yard waste for recycling (ie, making mulch) emitted 264 more pounds of CO2 than burying it in a landfill. In 2002, two of Sweden’s leading environmental authorities argued that recycling’s benefits were usually undone by the resources required to collect and process it.


A study out of Washington’s Gonzaga University calculated that all the garbage produced by Americans over the next 1,000 years would fit into a landfill just 44 miles square and 100 feet deep—less than one-tenth of one-percent of American real estate.
I like the last bit. In my lecture on environmental economics, I note that if Christchurch went through a landfill the size of our current Kate Valley facility every year instead of every thirty years, and if we were building new landfills on prime irrigated dairy land instead of scrub wasteland, the cost of buying land for landfill would still be only about $2 per person per year. Absolutely trivial.

My students tell me that the stuff they hear in my Economics and Current Policy Issues course is ... somewhat different from what they hear in their management or accounting courses. I enjoy providing diversity.

Isolated incidents, Canadian edition

RCMP Corporal Robinson, who helped Tazer to death a confused Polish man in the Vancouver airport two years ago, and who went on a year ago to get drunk and smash his jeep into a motorcyclist, killing him, will not face charges for impaired driving causing death or dangerous driving causing death; the BC Attorney General thinks it too hard to get a conviction. He's now finally being charged, but only with obstruction of justice. After the accident, he fled the scene and downed some vodka: either because of the trauma of the sober crash or to blur the evidence of his having been drunk.

He was suspended with pay last October, after he killed the motorcyclist. He's still suspended with pay.

Things aren't all rosy in New Zealand either, as previously noted here and here.

Rex Murphy on Climategate

Rex Murphy is about the only one at the Canadian Broadcasting Corporation who's worth anything.

Note Peter Mannsbridge's dismissive smirk at the end of Murphy's excellent summary of Climategate.

HT: Financial Post.

Friday 4 December 2009

Hadley offsets

Programmers can now buy bad code offsets: one offset per line of bad code they've written. The money goes to help fund good coding for various open source platforms.

So the folks over at the Hadley Center at East Anglia can atone for their sins. Excellent.

Of nanny states and bully states

Chris Snowdon notes that Action on Smoking and Health in the UK is largely funded by big-Pharma companies making Chantix, Nicorette, and so on. Remember that next time they talk about big-tobacco funding.

Snowdon also points to his review of Monteith's book The Bully State.
In the years that followed, countless campaigners, do-gooders and moral guardians invoked the precedent set by the helmet and seat-belt laws to compel other members of society to do what was thought best for them. Ever-dubious estimates of the money smokers, drinkers and motorists were costing the National Health Service were used to justify a raft of regulations, bans and ‘sin taxes’. Each new restriction inspired another. Few expected the ‘sin tax’ on cigarettes to inspire campaigns for higher taxes on alcohol, petrol, meat, sunbeds and carbon dioxide. Who really believed that schools would ban Marmite from being served inside and ice-cream from being sold outside? Even five years ago, the idea of forcing shopkeepers to hide their tobacco products from view or banning pub-goers from standing at the bar would have been almost universally mocked (the first of these will soon become UK law, the second has been trialled in several towns).

If the mandatory wearing of helmets and seat-belts marked the beginning of the nanny state, the smoking ban raised the curtain on the bully state. The smoke-free legislation was such a blatant attempt to discourage and ‘denormalise’ a legal activity that the fig-leaf of passive smoking could barely disguise the overt paternalism that lay behind it. In keeping with nanny’s transformation from Mary Poppins to Biffa Bacon, no exemptions could be permitted and no tolerance could be shown.
The UK sounds a lot like New Zealand:
The coalition of government agencies, professional reformers and state-funded charities that engineered the smoking ban set the template for the neo-temperance campaigners, green activists and food faddists who came in their wake.

These activists – or ‘storm troopers’ as Monteith’s describes them – are far closer to the government than the public is led to believe, both in ideology and funding. Action on Smoking and Health, Alcohol Concern, Barnardo’s and dozens of other ‘campaigning charities’ receive so much money from the state that they could almost be considered the government in drag. Through the use of rigged public consultations, dubious opinion polls and policy-based evidence, this self-serving elite manufactures a demand for greater state power.

A favoured tactic is to float a new piece of Draconia in the press and if it is met with anything less than howls of derision, it gets the go ahead. The public, says Monteith, are then fed ‘a steady stream of news releases, PR stunts, giveaways and junk science dressed up as authoritative research from quangos and politically active charities that have morphed into lobby groups’. If, on the other hand, the idea gets shot down (such as the plan to force people to buy smoking licenses or banning people from buying more than three drinks in a pub), it is popped into a file marked ‘Too Soon’, to be reopened at a later date.


Indeed, it is the very fact that the bully state serves so many vested interests that makes it so formidable. Although he is convinced that any system of government built on repression and prohibition will be doomed to failure, Monteith paints a convincing picture of a many-headed beast comprising ‘fake charities’, government departments, NGOs, ‘earnest do-gooders’ and ‘malevolent power grabbers’, to say nothing of the over-eager epidemiologists and the ‘monstrous’ British Medical Association.

Some are motivated by their own obsessions, some by government targets and others by the need to keep the grant money rolling in. Their one shared characteristic is a complete lack of humour...

Mont Pelerin

Looks like I'll be in Sydney next October. Plenary Session Six: New Threats to Liberty and the Private Sphere: Nannies and Busybodies, Tax Harmonisation and the Surveillance State. I'll be speaking on the first topic, of course.

I'm of course rather excited to be going to Mont Pelerin.
After World War II, in 1947, when many of the values of Western civilization were imperiled, 36 scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich von Hayek to meet at Mont Pelerin, near Montreux, Switzerland, to discuss the state and the possible fate of liberalism (in its classical sense) in thinking and practice.

The group described itself as the Mont Pelerin Society, after the place of the first meeting. It emphasised that it did not intend to create an orthodoxy, to form or align itself with any political party or parties, or to conduct propaganda. Its sole objective was to facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems.

Members who include high government officials, Nobel prize recipients, journalists, economic and financial experts, and legal scholars from all over the world, come regularly together to present the most current analysis of ideas, trends and events.
The link above has pictures from the first meeting of the society, including a nice shot of von Mises with Karl Popper, who'd left the University of Canterbury one year prior to the first MPS meeting.

Every bad idea is worth considering

For the New Zealand National Party, apparently. Bernard Hickey reports on the latest: having the NZ Superfund and ACC invest in the New Zealand housing market by providing long term low interest first home loans. Concludes Hickey:
It’s not going to happen, but it would be nice if the government focused on the real problems of affordability, which are not enough cheap land, high construction costs and low real wages.
Of course, first home buyers would be willing to pay more for a house if the present discounted value of the expected loan servicing costs are lower, so the price of starter homes is bid up, which then feeds through into the price of all houses, so long as there remain supply constraints.

Somebody should tell Bill English that Don Brash likes the idea so that he'll dismiss it out of hand as too radical.

Climate Rorschack

Stephen Dubner says that folks' responses to ClimateGate are a Rorschack test: the skeptics say it confirms their worst fears and the alarmists say there's nothing there worth worrying about.

I guess that makes me a bit schizophrenic: first I saw the butterflies, then the picture started looking more like dragons.

Comments policy

I've set things so comments have to come from some registered ID: OpenID, Blogger, or whatever else Blogger will take. This cuts down spam somewhat. But I delete comments that look like spam. I've been seeing more of these lately, things like "Great post on X, for more on X see (website)". I just delete them. If I've deleted one of yours in error, feel free to try again, but make the comment look less spammy and perhaps wonder why you've failed a Turing test.

Thursday 3 December 2009

Blame Canada

New Zealand's emissions trading scheme will only impose a cost on Kiwi taxpayers if we choose to let it do so.

John Key has exempted agriculture and a few others from the emissions trading regime for the next few years; most folks reckon that this then means the taxpayer is on the hook for any aggregate carbon liabilities under Kyoto.

But who says we have to pay? Just look at Canada:
Until now I believed that the nation which has done most to sabotage a new climate change agreement was the United States. I was wrong. The real villain is Canada. Unless we can stop it, the harm done by Canada in December 2009 will outweigh a century of good works.

In 2006 the new Canadian government announced that it was abandoning its targets to cut greenhouse gases under the Kyoto Protocol. No other country that had ratified the treaty has done this. Canada was meant to have cut emissions by 6% between 1990 and 2012. Instead they have already risen by 26%(1).

It’s now clear that Canada will refuse to be sanctioned for abandoning its legal obligations. The Kyoto Protocol can be enforced only through goodwill: countries must agree to accept punitive future obligations if they miss their current targets. But the future cut Canada has volunteered is smaller than that of any other rich nation(2). Never mind special measures; it won’t accept even an equal share. The Canadian government is testing the international process to destruction and finding that it breaks all too easily. By demonstrating that climate sanctions aren’t worth the paper they’re written on, it threatens to render any treaty struck at Copenhagen void.
So sayeth George Monbiot.

So, what happens if Key just stands up at Copenhagen and says:
Hey, folks, we're doing our share here. We've just implemented an emissions trading regime but it'll take us some time to get it all up and running. And know what? In the meantime, we don't see any point in paying the folks who managed to get the rights to carbon credits from decommissioned old Soviet factories. It's not like they'll start running those plants again in the absence of our paying them not to. So, for now we've got a domestic trading system that we're working to coordinate with the Australians if they decide to have a carbon trading system.

So, we're cutting emissions in a few sectors with a trading regime that'll eventually expand to cover the whole country. And once it does, then we'll start thinking about whether it makes sense to buy credits internationally. In the meantime, we're not going to be giving the finger to Kyoto the way those horrible Canadians have. We're trying, and we'll get there, so don't start boycotting tourist visits or anything crazy like that. And it's not like most of the rest of you have gotten any farther than we have anyway. Heck, we're even researching ways to make our cows and sheep fart less. We just don't see much point in paying this sin tax right now. Thanks very much.
What's the big downside that I'm missing?

Afternoon roundup

  • Hadley Updates

  • Kiewiet said "The vast regulatory machinery of the federal government has long been and continues to be stuck on stupid."

    Further confirmation via Reason, though more applied to the regulations of the several states and local districts: just try operating a simple food vending truck.

    Read the Washington Post article and weep.
    The holdup and a temporary patchwork of directives have thwarted Washington vendor Kristin Rider, 28. In July, says Rider, whose father owns the popular Pedro and Vinny's burrito cart at 15th and K streets NW, she bought a vending license and launched her own cart a few blocks away, at 19th and L.

    Within weeks, Rider says, an investigator from DCRA told her she was in violation of District rules and needed to obtain a location permit from the District Department of Transportation (DDOT). In the middle of the lunch rush, with customers waiting, she was forced to close. Rider says she called DDOT the next day and was informed that the agency no longer issued location permits and that one was not required.

    Rider returned to her cart. But within a week, another agent arrived. First, Rider says, he told her she needed the DDOT permit. She explained that she did not. About a month later, he returned and demanded to see receipts for food purchased. Furious and in tears, "I marched myself up to DCRA and showed them my vending permit. And they said, 'You shouldn't have got that,' " Rider said. "Well, that's not my problem. The fourth floor doesn't know what the fifth floor is doing."

Guaranteed minimum income

Nolan at TVHE notes Gareth Morgan's support for a move to a guaranteed minimum income plus a flat tax.

I don't agree with Morgan's wish to fund some of the move by the imposition of a capital tax. In an ideal world, I could go with Arthur Grimes's preferred land tax, but we're not in that world.

Interesting to note that Charles Murray proposed moving to a guaranteed minimum income in the US as well.

In Murray's proposed system, every adult American not incarcerated would get $10K, beginning at age 21, of which $3K must be used for health care. Every other welfare and aid programme would be abolished: TANF, Medicare, Medicaid, social security - everything. The system's total cost would be higher than the current welfare system but, as it would also replace social security, would be cheaper in the long run as more folks retire.

Murray notes that the current system places lots of restrictions on individuals with respect to eligibility whereas a straight cash transfer lets people make their own decisions about how to run their own lives. Moreover, since everyone would know that everyone gets the transfer, an element of personal accountability is induced: everyone knows that everyone has $10,000 a year, so someone who then requests further assistance from the private charitable sector has to answer some relatively hard questions. Other effects: fathers cannot evade child support as the judge will know the location of the bank account where the $10,000 is deposited.

In the New Zealand context, this latter point could be important: eliminating the DPB and ensuring judges have ready access to fathers' bank accounts would provide a powerful inducement for fathers to be named.

Sounds great, but I'm still worried about whether the system is an equilibrium. What happens when some poverty advocate puts out a report showing some grandmother taking care of 20 kids under the age of 18 trying to get by on her $10K entitlement. Does Labour then win on a platform that brings back much of the old system in addition to the guaranteed minimum income?

I also worry about what happens to the stringency of immigration restrictions: I like immigration, but would worry that a guaranteed minimum income would provide a powerful inducement for tighter immigration controls. Presumably benefits could be restricted to citizens rather than just permanent residents. But is that stable either?

I could probably be convinced to push the button for a scheme of this sort in preference to the current system. Not sure that I'm there yet, and I'm not there if it's funded through a capital tax, but I could be convinced.

Political charities


I'd wondered a while back whether the rules in New Zealand were different than those in the US: Doug Sellman's anti-alcohol lobby group here gets charitable status (contributions tax free) though its main purpose seems to be political advocacy.

But today I read that the Sensible Sentencing Trust is likely to have its charitable status revoked because the Charities Commission views its main purpose as being political.

Maybe the Charities Commission is doing some random audits.

DoC disappointments

I'm not surprised that New Zealand's Department of Conservation continues to do its best to stymie Roger Beattie's efforts to farm weka for meat. Beattie has been breeding weka on his farm near Christchurch. The bird is endangered on the New Zealand mainland but plentiful to the point of being a pest on the Chatham Islands, where Beattie worked a long time back. And Beattie's had to fight DoC every step of the way in his private conservation efforts. Beattie's current plan:
Beattie believes conservation and business go hand-in-hand. He said if there was money to be made from an endangered species, it would never die out.

Beattie said DOC's control of bird species created a protracted permit process that strangled entrepreneurial enthusiasm.

If approved for commercial farming, Beattie planned to sell weka breeding pairs to farmers and lifestyle-land owners. He estimated the birds could return $2000 per hectare.

Beattie, who has about 30-plus birds, said weka bred prolifically in the right conditions, hatching up to three clutches of four or five eggs annually, with birds ready for the table at four months.

"There are a number of natural species we harvest and farm, and birds are no different," he said.
I am surprised that DoC's excuses are so, well, horribly lame.
DOC Canterbury conservator Mike Cuddihy said the proposal raised questions, and that there were no precedents. Buff weka were protected, yet extinct, in mainland New Zealand, but could be killed and eaten on the Chatham Islands, where populations were at pest levels.

"Buff weka have a curious juxtaposition of status between mainland New Zealand and the Chathams," he said. "Breeding for consumption in mainland New Zealand is something that goes beyond anything we have contemplated, and there are no precedents that I am aware of."
Why can't Roger sell breeding pairs of an endangered species that he's raised himself? Because it would "raise questions". The question it raises for me is whether DoC's opposition is largely based on not wanting to be shown up by a private entrepreneur. They may well not want that kind of precedent. After all, what would happen to DoC's funding if private folks were allowed to save endangered species?