Saturday 28 February 2015


Here's a fun one for those of you still based at a university.

All of you put together a Human Ethics Review proposal for a field experiment on Human Ethics Review proposals.

Here is the proposal within my proposal.
Each of you would propose putting together a panel of researchers at different universities. You would propose that each of your panel members - from diverse fields, seniority levels, ethnicities and such - would submit a proposal to his or her ethics review board or Institutional Review Board for approval, and each of the panellists would track the time it took to get the proposal approved, which legitimate ethical issues were flagged, which red herring issues also held things up, and how long and onerous the whole ordeal was.

Still in your proposal, you would then propose gathering the data from your panellists and drawing some conclusions about what sorts of schools have better or worse processes. Specific hypotheses to be tested would be whether universities with medical schools were worse than others because medical ethicists would be on the panel, and whether universities with faculty-based rather than centralised IRBs would have better approval processes.

You would note that members of your panels could ask their University's HR advisers to get data on the people who are on the IRBs - race, gender, ethnicity, area of study, rank, age, experience, time on panel, number of children, marital status, and sexual orientation (though not all of those would be in each place's HR database); you'd propose using these as control variables but also to test whether a panel's experience made any difference and whether having a panel member from your home Department made any difference. It would also be interesting to note whether the gender, seniority, ethnicity and home department of the submitter made any difference to the application.
End of the proposal-within-the-proposal.

Now for the fun part: each one of you reading this is a potential member of a panel for a study for which nobody has ever sought ethical approval, but which will be self-approving in a particularly distributed fashion: The IRB proposal to be tested is the one I've just outlined. Whichever of you first gets ethical approval is the lead author on the paper, is a data point, and already has the necessary ethics approval. Everybody else, successful or not, is a data point.

I expect that they might raise legitimate concerns about accessing private HR data and that you limit yourself to publicly available data, or that you survey your IRB members AFTER they issued a decision on your proposal. Those would be very legitimate things for them to point out, and they are the practices I'd want you following anyway: don't bug your HR people. They could also very legitimately point out that since you have zero reason to expect that marital status, children, or sexual orientation have any effect, you shouldn't even survey them asking for it. A good ethics review process, I'd expect, should raise both of those.

More meddlesome ones might ask whether you have appropriately considered the value of the IRB's time across the different institutions. You might then note that getting some 'best practice' guidelines out of this could save many multiples of that time for anybody who's ever sent stuff to an IRB.

But if they tell you you'd need to seek up-front approval from each of the IRBs for your study on IRBs, well, they're proposing killing the study and it would be interesting to know which universities would do that. While they’d be raising the deception of IRB members as an issue, the deception would be necessary for the study to be undertaken.

If there seem to be enough potential folks to make a go of this, I think it could be a lot of fun.

Now it could be that I've just wrecked the potential for running this particular study.

But it could also mean that IRBs that have read the post would be more reasonable in assessing your proposal to assess other IRB proposals. So either way it's good.

If you wind up submitting the proposal above, let me know that you're doing so (so I can tell you if anybody else at your school's already done it) and then let me know how it turns out. If enough people get back to me, then that's the study; first one successfully through can be lead and I'll forward the other data points on to that person.

If we don't have enough data points, well, the first one who did get approval will have to run the study as I actually outlined it above the hard way: setting up a panel of people who will formally submit an IRB proposal. I have a couple of really fun field/audit ones that would be worth doing in their own right, but I'm not going to post them here for fear of skewing things all the way down.

And, to be very clear, lead author above means "you do all the work".

Previously: The Ethics of Ethical Review Boards.

Friday 27 February 2015

Missed opportunity

Sadly, our tech regulations do not put us in the outside of the Asylum.

I wrote in May 2013:
New Zealand keeps ranking at or near the top of the various indices of economic and social freedoms. We could do well by encouraging greater immigration of American techies fed up with that the American governmentseems to be archiving and storing just about everything for later searches. Just show them Novopay as example of how we couldn't, even if we wanted to.
Alas, we're not immune to the shenanigans going on elsewhere. Our NSA, the GCSB, is getting a legislative redraft. Thomas Beagle of TechLiberty summarisesNoRightTurn has a few additional comments. I'm not a lawyer - maybe things aren't as bad as they seem. David Farrar is considerably less concerned....When the US seems to be doing everything it can to convince its tech guys that the government really does want to be spying on everybody, and that the IRS wants to know everything you talk about at political meetings if you have small-government leanings, the last thing we need are headlines suggesting we're heading down similar paths if the legislation doesn't actually do that. And if it does, it does need changing.
At the time, a whole pile of people offered me big assurances that the TICSA legislation was far more innocuous than the press made out and that it wouldn't just work to kill innovative startups who couldn't handle the regulations and that it was all just a beat-up by people who didn't understand the regulations and hadn't had all the super-secret briefings.

The NZ Herald now tells me that we've scared off a pile of tech investment. I guess that they didn't understand the regulations or profit from the super-secret briefings either.

Charting the Minimum Wage

It's never enough, is it?

As reply to those clamouring for a higher minimum wage, after the National government just hiked it by $0.50 to $14.75, some charts from MBIE's advice on the minimum wage hike.

The minimum wage is 64.9% of the median wage and will rise to about 65-66% of the median wage depending on what comes out in the next Income Survey release. 

Update: Here's me quote at The NBR on the same topic.

Keyhole solutions: alcohol edition

One of the main real external costs of alcohol use comes via alcohol-associated crimes. And so it's good to see the government attempting a more finely tuned intervention on this than using excise tax.

David Farrar points to the Drug and Alcohol Testing of Community-based Offenders and Bailees Legislation Bill coming up. In short, it allows drug and alcohol testing to be a condition of bail.

Why is this a good idea? Something similar seems to have done a lot of good in Hawaii. Here's Heritage on the Hawaii Opportunity Probation with Enforcement (HOPE) project, which targeted methamphetamine users, and here's an evaluation of South Dakota's programme that targeted alcohol use.

To be very clear: I only support this kind of thing for offenders who have committed real violent or property crimes, and not those caught simply for drug possession.

But for those offenders who go out and do bad things to people while drunk or high, well, they've probably well signalled that they should be kept away from the stuff for a while.

Please review the ethics of human ethics review

Human ethics review panels are the worst. Designed to prevent atrocities like Tuskegee, they then metastasised: any time your research could possibly involve a human subject, there are a billion forms to fill in. So it's usually easiest just to avoid doing field research.

U Queensland's Paul Frijters didn't avoid doing field research. He sent actors out onto Brisbane buses with not quite enough money on their fare cards to see whether drivers were more likely to give white passengers a pass.

Adam Creighton and Julie Hare write in The Australian on what happened next.
Following national media interest arising from a media release published by the university in March 2013, Professor Frijters was told his research was “banned”.

“The university then proceeded to pursue charges of research misconduct against me, eventually (demoting) me from professor to associate professor in March 2014 and threatening me with dismissal if I did more research like this,” he said.

The demotion was later overturned following an independent inquiry showing the university’s own processes had failed and that punishment meted out was “overly harsh and inappropriately punitive”.

Vice-chancellor Peter Hoj yesterday said the university would not comment.

A spokeswoman for Brisbane City Council, which owns the Brisbane bus company, said the research was not “authorised” by it and it was published without the council’s knowledge.
Here's the original paper.

Here's the Guardian, whose story makes it a bit clearer why human ethics review panels are the worst - simply the worst bunch of Vogons ever to be imposed on academics working in the social sciences.
The university then banned further publication or promotion of the study on suspicion that Frijters not sought the necessary approval from the university ethics committee.
The university was concerned there was no “voluntary informed consent” from the bus drivers or “gatekeeper approval from the Brisbane city council”.
You cannot test whether a bunch of Brisbane bus drivers are racist by first asking them for permission to test whether they are racists.

Here's the kind of ethicist from whom Frijters would have needed to have sought permission:
Clinical ethics expert Dr Andrew Crowden told Guardian Australia that Frijters had made a “common mistake” by underestimating the ethical risks of his own research.
But the university had “shared the mistake” when his department signed off on the study, which showed a “systemic failure” that UQ had chosen not to address despite Crowden’s recommendations in response to the case.
Nicholas Gruen is dead right:
Economist Nicholas Gruen said the case was a “terrible” example of how universities dealt with ethics considerations as “a matter of bureaucratic arse covering and the avoidance of any kind of discomfort for anyone”.
“This sorry saga illustrates the way ethics approvals [are] genuinely strangling all kinds of research initiatives,” he said.
“Essentially the entire ethics procedure is an attempt to avoid anything that might make anyone squeamish or uncomfortable. Of course good research, certainly in social sciences will often do that.”

Update: Helen Andrews points to some more thorough work on IRB horrors:

4 years on

The government rightly took a lot of criticism for its initial attempts to artificially restrict downtown land supply to force a compact city form and encourage higher-valued development. The planners here exhibited basic cargo-cult thinking: because successful cities have high downtown property prices, they thought they could make Christchurch successful by forcing prices to be high. Well, that doesn’t work: high prices in successful cities reflect that people get a lot of value from being located in great downtowns, not the other way around. 
In the longer term, because so much has moved on to the suburbs and to neighbouring districts, downtown land prices will have to drop. When that happens, developers will be able to bring to market properties with rental rates that could draw in tenants – if the planners don’t mandate that everything be plated in gold. Downtown will then come back but as part of a polycentric city. 
This too should not be overly lamented. While I really love the tight downtown core in my new home, Wellington, it is risky. Faultlines can open unexpectedly and in unanticipated locations. Wellington really cannot have multiple downtown cores because of geography but Christchurch can build in resilience against future events by having lots of centres of economic activity. And, fortunately, while the economic literature points strongly to the benefits of urban agglomeration and of having lots of people in a city, it is far from clear that those benefits require having a single dense centre. 
Hit the link to read the whole thing...

This is what happens when you don't read Demsetz

Way too many policy arguments take the following form.
  1. Markets in an ideal world are efficient.
  2. Here is a potential deviation of the real world from blackboard conditions, so we're in a second-best.
  3. Policy can ameliorate outcomes when there is a market failure. So, here's what we must do.
What's missing? Any evaluation of whether the policy cure is actually an improvement on the status quo. Some policies are like using tweezers to pull out an irritating splinter - great idea. Others would have you hack off the arm to avoid the splinter. 

Harold Demsetz very nicely made this point way back in 1969. He was there critiquing Arrow on information market failures, but the lesson is more general. It isn't enough to simply point out a potential market failure. Markets fail but policies don't automatically induce nirvanas. We need comparative institutional analysis to tell us which world sucks less: the world with a market failure that isn't addressed by policy, and the world in which a real-world policy involving actual tradeoffs comes in to try to solve it.

Today's lesson in "this is what happens when you don't read Demsetz" comes from Dean Baker over at Cato Unbound.

Baker's argument:
  • In a first-best world, we would have proper congestion charging and the like;
  • We don't have proper congestion charging;
  • Taxicabs can increase congestion;
  • Uber likely increases the number of cabs;
  • Therefore we need a complicated regulatory structure for Uber imposing fees by time of day and location of service.
Baker also reckons that while Uber's drivers are contractors, not employees, and despite that those drivers like the flexibility, the drivers should be treated like employees for minimum wage and overtime purposes.

Some folks just hate the idea of voluntary transactions among consenting adults that don't route through the State somehow along the way. 

A couple things to note:
  • It's eminently unclear that Uber increases congestion. In the longer term, it will reduce the amount of street space that need be devoted to parking, freeing up more road for driving. It will also reduce peoples' need to take a car for the day because of that one trip they need to make mid-day and instead let them commute in using the bus, then take an Uber for the part when they do need a car. 
  • Using charges on Uber to solve congestion instead of broad-based congestion charging is nuts. Unless Uber is a very large proportion of cars on the road, having any effect on congestion using charges on Uber would have to involve just massive variability in ultimate Uber charges on consumers, which would deter any use of the service. I favour congestion charging, but implementing it on Uber only makes as much sense as imposing congestion charging only on blue cars. 
Update: a reader points out that Uber surge pricing is already a form of congestion charging. It's a good point.

Thursday 26 February 2015


Ok, so the Resource Management Act isn't supposed to have anything to do with blocking competition, and the Overseas Investment Act is only stopping bad stuff, right?

Somebody explain this mess in Glenorchy then.

If I'm reading the story correctly:

  • Americans resident in Glenorchy bought a general store and campground;
  • They got resource consent for some landscaping, have filed a resource consent for other rejuvenation, and ran a landswap with Council to get a right-of-way to the facility;
  • The Glenorchy Community Association withdrew support for it all when its Secretary, who runs a business in competition with the proposed campground, got mad about the process, and this somehow matters for Glenorchy Council;
  • Now they're having to get retrospective consent from the Overseas Investment Office because somehow it's a matter of national strategic importance whether an American owns a campground in Glenorchy;
  • They're now running the whole thing through a notified consent process because everybody got mad; campground competitors will then get their chance to claim that it'll hurt the town's amenity value or be bad for traffic.
Does this sound like something that should happen in the Outside of the Asylum?

Wednesday 25 February 2015

Establishing causality: one view

Economists agonise, rightly, over causality: how can we tell whether one thing causes another thing rather than the other way round or whether both things might just both caused by some underlying third thing.

Meanwhile, here's how the debate on causality plays out in the political arena.
Mallard is far from an idiot, but this where public debate on causality is at.

Granger wept.

PS: via Lindsay Tedds - lagged variables don't cut it either.

Classification costs revisited

New Zealand's Censor's office is really quick on OIA requests.

A couple of weeks ago, when there was some fooferah about Canterbury Museum's having put on a t-shirt exhibition that included a Cradle of Filth t-shirt that was banned in New Zealand, I asked the Office of Film and Literature Classification, via twitter, how much it cost to ban the t-shirt. Since the shirt was available online for about $13 plus shipping, I expected that taxpayers spent rather more on banning the t-shirt than on buying it.*

OFLC got back to me very quickly, also on Twitter, with a cost of $971. I was pleasantly surprised; I'd expected it to have been worse. 

They emailed me today with the workings. 

Unfortunately, the figure is really just the average cost of classifying each item: their total expenditures in the 2007/08 fiscal year divided by the number of items classified. So it cost, in 2007/8, just under a thousand bucks per item classified.

Kate, the Information and Policy Manager at the Classification Office, also noted:
"There was one additional direct cost for the t-shirt. It had to be purchased. that was $240.95."
I hadn't specified cost-of-shirt in the OIA request, so that's why it wouldn't have been in the answering tweet.

Normally, they have to be provided a copy of the item to be classified, but the member of the public offended by the t-shirt and registering the complaint didn't have the t-shirt. I'm guessing, but have not checked, that the bulk of the cost there would have been rush shipping to New Zealand of one Cradle of Filth t-shirt.

Kate notes that the t-shirt remains in the possession of the Classification Office.

Whatever your views on the whole classification and censorship regime, their OIA practices are absolutely top-notch.

* The all-up costs of displaying it would almost certainly have been higher, though, as it needed its own protective cubby-hole where sensitive eyes might not see it; the whole display would not have been cheap.

Tuesday 24 February 2015

Parallel importing Economist

Why is The Economist more expensive in New Zealand?
The simple answer is price discrimination. If readers in New Zealand are willing to pay more for subscriptions to The Economist than are readers in Canada, then prices will vary across markets – unless there is a way for consumers in the cheaper market to on-sell to those in the pricier markets, or for those in the expensive markets to pretend to be in the cheaper market.
Fortunately, you can parallel import The Economist simply by providing a Canadian billing address.
Price discrimination does not work when consumers in the higher cost market can easily access the lower cost market. New Zealand’s parallel importation regime helps to break international price discrimination that too often works to the detriment of Kiwi consumers.

I have not seen any study on it. But I would be willing to bet that New Zealand’s parallel importation regime has done more to help Kiwi consumers than has anything that the Commerce Commission has ever done. It is very likely our most effective competition-enhancing institution.
That was me reprising parallel importation and price discrimination in last week's print edition of the National Business Review. Subscribe!

Monday 23 February 2015

Super idea

David Seymour's call for a referendum on superannuation changes is a good one, but the politics is still tough.

I'm not a fan of referenda in general. But John Key's painted himself into a corner on this one, having promised that he'd never touch superannuation. Everybody knows that best policy here is to announce, today, changes that will start phasing in at some future date. For example, the government could today announce changes that would apply from, say 2022, when the age of eligibility would then start rising by a year every 2 years or so, and that, from 2022, Super would be CPI-indexed rather than wage indexed. 

This could have provided a clean way out for Key. Having promised no changes, Key could have announced a referendum and say that he wouldn't reverse his promise on it unless he had a specific mandate. 

Except the immediate move from Labour would be to frame it as a win for Labour. And Key won't want to hand them that. 

The only way it works now is as a referendum on a bundle of changes sufficiently different from whatever Labour's proposed that Labour can't claim it as a win. Either that or getting a time machine and running the referendum before Labour moved to support changes to Super.

User Pays Policing?

Dave Armstrong offers a reductio ad absurdum considering what would happen if we took user pays for police services too far to argue against user pays for police vetting. I'm not sure where I stand on this one; I can see arguments both ways. But one example in Dave's reductio did not seem so absurd to me:
When you finally get home, you discover that you have been burgled. Two police turn up immediately. One brings out a glossy folder. "Would you like to pay for our beginner, `We'll Have a Go But Probably Won't Find the Burglar' plan or our slightly more comprehensive `We'll Raid a Fe Houses and Ask Around' plan, or our deluxe `We'll Nab the Bastard No Matter What' plan?"
Exactly this idea occurred to me a couple of years ago, when my house was comprehensively burgled. We had left the house for a couple of days and a night to have a floor relaid, leaving the key with the contractors. When we came back, the place had been done over with no sign of forcible entry. The police came and took fingerprints, and we gave them the names of the contractors, who had to be the prime suspects. After a few days, I called the police to see if any progress had been made. I was told on the phone that they hadn't followed up with the contractors yet as they were waiting for information to come back from the fingerprint matching. That day in the mail (posted the previous day) was a form letter saying that they had been unable to find the culprit and so had closed the case!

The truth of the matter is that in Christchurch,with so many people temporarily vacating their homes for EQC repairs, there are simply too many burglaries for the police to be able to undertake a serious investigation, even, apparently, when given the names of the prime suspects.

So, I wondered, why not have a two-tier police system, just as we do with health. The theory for two-tier funding in health goes something like this. We would like to have a publicly funded comprehensive system of health care, but given the high demand for health care in a wealthy society, coupled with the arrival of ever-more-expensive possibilities for care imply that public provision at high levels would require counter-productively high rates of tax. So instead, we offer a base level of care, and allow those with a greater preference for health or higher incomes to supplement their care out of their own pocket. This enables us to get more money into the health sector without raising marginal tax rates, and still providing a base level of care that we think consistent with the levels we consider a basic human right. Of course we can debate where that base level should be, what is the cost of increasing marginal tax rates, etc. but that doesn't change the logic of a two-tier system.

So imagine the same approach to police services. There is a minimum level of police protection that we all receive (e.g. violent crimes are investigated thoroughly), and then for petty burglaries w have the option of buying hte `We'll Nab the Bastard No Matter What' plan. I suspect that insurance companies might well be prepared to pay for that plan consistently, putting more money into policing without requiring increased taxation. Of course, many people will feel quite uncomfortable with something that looks like "one law for the rich and one for the poor", but against that consider two things: First, at the moment, we are pretty much all put on to the `We'll Have a Go but Probably Won't Find the Burglar' plan (actually, that sounds better than the plan we were forced onto after our burglary), so my scheme doesn't actually reduce the level of service for anyone. And second, there are massive negative externalities from allowing a social norm to develop in which petty crime goes uninvestigated. If even only a fraction of burglaries were investigated thoroughly, the apprehension of serial burglars would confer benefits on others, particularly if it helps petty crime become denormalised.

But that still leaves the question of why the police are devoting resources to evicting law-abiding spectators from cricket games in order to enforce the ticket issuers private terms and conditions. If ever there was a case for user pays for police time, this is it.

Wealth heritability

Swedish income and wealth are strongly heritable, as measured by differences between monozygotic and dizygotic twin outcome variances.
These patterns of correlations illustrate Turkheimer's (2000) three “laws” of behavior genetics, which are not theoretical necessities, but rather stylized facts that summarize the broad pattern of empirical findings in several decades of behavior genetics studies. The first law states that all behavioral outcomes are heritable. For comparison with our estimates of around 0.50 for permanent income, the heritability of personality traits and cognitive abilities is about 0.40 to 0.60 (Plomin et al. 1994, and the heritability of height is about 0.80 (e.g., Silventoinen et al. 2003). Indeed, although Turkheimer's first law is stated qualitatively, it could be made quantitative: Of the hundreds of outcomes analyzed to date, almost all have heritabilities estimated between 0.20 and 0.80 (see Plomin et al. 2008 for a review). The second law states that common family environment explains less variance than genes do, and the third law states that a substantial part of the variance in the outcome is left unexplained by the sum of genetic and common environment effects. Our results are consistent with the second and third laws, as well.
We still have little clue which genes are associated with intelligence and income; results from one study won't replicate in another population, for example. Sample sizes generally are not large enough to detect small effects. I love this part:
We also predict that methodological challenges—such as multiple testing—will generate many more false positives in the literature, especially in the short run. The press is likely to distort findings and exaggerate the degree to which specific genes “determine” outcomes. In most cases there is no “gene for [insert behavior here],” despite frequent newspaper headlines suggesting that there is. Indeed, for most behaviors, researchers are struggling to find a SNP with an R2 that is greater than one-tenth of 1%. Researchers in this field hold a special responsibility to try to accurately inform the media and the public about the limitations of the science.
Moving to policy, they note:
Governments will need to formulate new policies that maximize social welfare in a world where people with genetic advantages will wish to share them with potential employers and insurers, and people with genetic disadvantages will want to shroud them.
Indeed. We probably need pre-insurance markets against inheriting an unfavourable genotype, but those would likely unravel anyway where parent type determines most of the odds, and increasingly so as assortative mating strengthens.

Greg Clark argues that strong heritability of life outcomes makes an argument for redistribution: as relative positioning doesn't change much even where redistribution is heavy, he takes it as an argument for that labour supply of the most productive cohorts does not respond much to taxation. There's plenty of other evidence arguing against that point, and Jason Collins's review of Clark is on point, but let's take it for now for argument's sake.

What is appropriate policy if both of the following are true? I'm not saying these stylised facts are true, but I put better than even odds on each element's being true.
  1. Generalised ability - the mix of cognitive and personality traits that combine to affect income and employment - is strongly heritable. The children of the more able will be more able; the children of the less able will be less able, although outcomes for either can be moderated a bit by environmental interventions;
  2. Family size is elastic to income: increasing a household's income, all else equal, increases their optimal family size; decreasing their income decreases it. Yes, richer people tend to have smaller households than those in the lower-middle of the distribution, but that's part of the all-else-equal.
You could well wind up with longer-term effects on relative skilled labour supply via an extensive margin in population composition, even where any individual's labour supply is highly price inelastic. Welfare economics gets awfully messy when future population distribution is one of the things affected by policy.

HT: Collins on the Clark piece.

Friday 20 February 2015

Industry bad, public good

So the official line seems to be that industry money always corrupts, but that public funding never does. Here's Otago's Jim Mann:
As a member of the World Health Organization (WHO) nutrition advisory committee, Mann himself cannot accept funding or gifts of any kind from the commercial sector.

"I'm glad that while with WHO, I've been in a position where I've not been able to accept funding for any project I've lead. I don't even feel able to accept an invitation to go out to lunch," he says.
The story feeds off a recent set of articles in the BMJ running conspiracy stories about industry funding. I suppose that membership in WHO advisory committees couldn't itself possibly be the source of any conflict of interest.

There seems to me to be a growing international push to shut down research that disagrees with the comfortable public health party line. Making industry funding controversial per se makes it more difficult for university researchers doing work funded by industry, regardless of the amount of academic freedom built into any of the arrangements and regardless of the oversight arrangements.

So where does the whole "industry necessarily corrupt and evil; government-funded NGOs necessarily good" line lead? Well, let's look to today's news from Western Australia.

Healthway was established to fill the sports sponsorship gap when they banned tobacco sports sponsorship. Healthway was so pure in spirit, that they didn't ever want to have anything to do with anybody who'd ever had any dealings with the tobacco industry - maybe they'd have suffered second-hand corruption or something:
The Board considered an addition to the existing policy with respect to contractual arrangements with companies or organisations which may have tobacco company involvement to reflect other possible “connections” or association with the tobacco industry. The Board approved that:
Subject to any contrary law, Healthway will not deal with any:
  • Person, company or entity receiving money or revenues from the tobacco industry or its associated foundations, whether directly or indirectly, or having arrangements, or dealings with the tobacco industry, whether directly or indirectly, which may actually, potentially or perceivably compromise tobacco control initiatives;
  • Person, company, foundation or entity that directly or indirectly has arrangements, connections or dealings with the sales, promotion or distribution of tobacco products which may actually, potentially or perceivably compromise tobacco control initiatives.
And in today's news, it looks like Healthaway's sponsorship didn't just require being entirely pure about never having ever ever touched a smoke. It seems to have required giving lots of complementary tickets to the Healthaway Board. Because by definition, if it's done by a government-funded NGO, it totally can't be wrong.
Premier Colin Barnett will meet Public Sector Commissioner Mal Wauchope today to discuss the future of prominent Healthway chairwoman Rosanna Capolingua and her board after a damning investigation uncovered a VIP ticket scandal, plunging the taxpayer-funded health promotion agency into crisis.

The investigation, conducted by the Public Sector Commission after irregularities were uncovered by the Auditor-General, found Healthway procured thousands of tickets worth hundreds of thousands of dollars through sponsorship agreements.

Some of these went to family and friends of Dr Capolingua, former Healthway executive director David Malone, deputy chair Cathcart Weatherley and other staff.

The investigation found the volume and nature of hospitality benefits obtained via sponsorships of the Perth Wildcats, Perth Glory, WA Cricket Association and concert promoter Mellen Events were “excessive and inconsistent with the obligation to be scrupulous in the use of public resources” under the Public Sector code of ethics.
Is there any known safe level of government funding? What can we do to help to reduce the risk?

A three-quarters full glass

It is now almost a month since I moved from Christchurch to Wellington and so it is a good time to reflect on the move.

Is the glass is half empty?
  1. Wellington tap water is heavily chlorinated;
  2. no Christchurch School of Music;
  3. I'm no entophobe, but the insects here are bigger and more intrusive;
  4. the local Super XV team is the Hurricanes not the Crusaders;
  5. just as I leave Christchurch for Wellington the former gets a cricket ground better than the Basin Reserve. 
Or is it half full?
  1. tuis in the back garden;
  2. forest walks in the city;
  3. lots of school options with no school uniform;
  4. in contrast to Christchurch, downtown doesn't look like there was a major earthquake in the past 12 months
  5. my employer not only provides rubbish bins in offices, but allows the cleaning staff to empty them! 
These are not equally weighted: On balance, it has been a good move. 

Franks on proposed super-cities

I agree with Stephen: is puzzling that business has not watched the Canterbury experience, and the extent to which Canterbury has been saved from presenting unrelieved incompetence by the safety valve councils of Selwyn and Waimakariri.  You’d think they might have asked Hugh Pavletich to come up and report. Christchurch has been hostile to business ever since Christchurch City was jammed together as a prototypy ‘super-city’ two decades ago.
Many Wellington business reps have an intuitive faith in  ’bigger is better’ territorial government. I say ‘territorial’ because it would be a lie to call Uber-City Wellington and Super-City Auckland “local government”. Two councils governing half the population of New Zealand may be government, but it is certainly not ’local’ government, on any measure.
This faith based policy development by business reminds me of the business elite of Britain on the Euro.
I think folks in central government are grasping at straws here, trying to find ways to make local government suck less. My preferred approach instead suggests fixing councils' incentives by changing local government finances, then letting small councils compete with one another for residents, businesses, and industry.


Thursday 19 February 2015

The trouble with Net Run Rate

In any competition in which there is pool or round-robin play to rank teams before playoff rounds, there needs to be some method of deciding the relative ranking of teams who finish equal on wins and losses. Ideally, this method will reward the teams that have performed best, and also not create any perverse incentives for teams to do anything other than act in a way to maximise their probability of winning.

A nice example of perverse incentives came in the 1999 Cricket World Cup. Only two teams out of New Zealand, Australia, and West Indies were going to carry on from their group into the next round. The rules were such that teams carried through only their results against other teams that made it to the next round. Prior to the match between the West Indies and Australia, New Zealand had beaten Australia but had lost to the West Indies. Australia therefore needed to beat the West Indies, but also wanted WI to be the team that carried through with them so that their loss against NZ didn't matter. As is traditional in the Cricket World Cup,the method used to rank teams with equal numbers of wins and losses, was net-run-rate (NRR)--the difference in a team's average runs scored per over faced and its average runs conceded per over bowled. Batting second, Australia therefore did a deliberate go-slow in order to win, with their 5th wicket partnership taking an extraordinary 127 balls to score the 49 remaining runs needed for a win. This was designed to elevate the West Indies' NRR above New Zealand's. As it turned out, the strategy was not successful, as New Zealand still had a match against the lowly ranked Scotland, and took extraordinary risks to not only win that match but win it by a sufficient margin for their NRR to overtake the West Indies'.

In the current World Cup, there isn't the same "super 6" 2nd stage where teams only carry through some of their points from the first round, but NRR is still used as the tie-breaker. This system is still flawed, as exemplified by Tuesday's match between New Zealand and Scotland. Anyone looking at the two innings scored could be mistaken for thinking that the match was close. It wasn't. What happened was that New Zealand bowled Scotland out for a very low total, and was almost guaranteed a win. When it was New Zealand's turn to bat, they strove to win the match in a few overs as possible, in order to maximise their runs-per-over figure. The fact that they lost 7 wickets in the attempt meant that they did present Scotland with the sniff of a chance of an upset, but the 7 wickets will have no bearing on their eventual NRR.

This exemplifies three problems with NRR:
  1. The effect of a large win against a lower-ranked team on NRR depends on which team bats first, since the team batting second only bats until it has overtaken the other team's score, meaning that that innings gets a lesser weight in the runs-per-over calculation than an innings where all 50 overs are faced. 
  2. The magnitude of a victory when the team batting second wins is a function not only of how many balls it took the team to amass the winning total but also the number of wickets lost in the process. NRR only takes the former into account. This creates the perverse incentive where New Zealand put their win (slightly) at risk by worrying only about how many overs they used and not how many wickets they lost. 
  3. The ranking of two or more teams should not depend on which one beat up the most on a team ranked well below them. If, as could easily happen, three teams (say, Australia, New Zealand and Sri Lanka), finish in a tie for first place in their group, the determination on goes through the quarter finals ranked 1st, 2nd, 3rd, should not come down to which team beat Scotland b the biggest margin.
So with these flaws in mind, here is a sequence of proposals to replace NRR with a different tie-breaking rule.

Adjustment 1: To deal with the first problem above, use the average margin of victory/loss rather than NRR: If the team batting second loses, its margin is its score divided by the score required to tie the match. This will be less than 1. The winning team's margin is the reciprocal of this--the target score divided by the chasing team's score. If the team batting second wins, its margin is the number of balls available to it + 1 divided by the number of balls actually used. The losing team's margin is again the reciprocal of this. In the case of a tie, the margin is 1.0 for both teams.

Adjustment 2: To deal with the problem of teams sacrificing wickets for the sake of fast scoring, amend Adjustment 1 in the case where the team batting second wins, by dividing the predicted score at the end of 50 overs by the score required to tie (the implicit score predictor in Duckworth-Lewis would work for this, although I'd prefer to use WASP due to its adjustment to conditions).

Adjustment 3: Make the calculations iteratively. Let there be n teams in a pool. Construct the table at the end of pool play using points scored, and using Adjustments 1 and 2 to rank teams otherwise tied. Then remove the bottom-ranked team and give them a rank of n. Now reconstruct the table using only games played amongst the remaining n-1 teams, and again find the lowest ranked team. Give it rank n-1, remove it and reconstruct the table with the remaining n-2 teams, etc. As an example of how this could be beneficial, imagine that in the current world cup, Sri Lanka beat Australia, Australia beat NZ, and all three beat England and the other three teams except that the game between Australia and Scotland is rained out. Under the system in place for this competition, Sri Lanka and NZ would finish ahead of Australia simply because Australia were denied to opportunity to play Scotland. Under Adjustment 3, the games against Scotland would be irrelevant for deciding the relative ranking of the top three teams. *

Adjustment 4: O.K. now I am getting well out of the realm of feasible rules into the kind of competition we would have if the ICC comprised exclusively economists, but it is fun to speculate. My adjustment 2 still does not properly align incentives because maximising the expected margin of victory is not the same thing as maximising the probability of victory. So instead, let's define the margin of victory in the following way. Draw the WASP-worm graph of the percentage probability of winning for the second innings as a function of the number of balls bowled. This is a graph  is contained within a rectangle that has a length of 300 and a height of 100. The value for the team batting second would be the area under the graph divided by the area above it. The value for the team batting first would be the reciprocal. Using this method, it would be possible for the winning team to have a lower score than the losing team, but no matter: this scheme means that the way to maximise your team's tie-break variable would be to maximise your probability of winning.

Adjustment 4 tries to align incentives with the only thing that should ever matter in sport--trying to win--but it doesn't deal with the situations like Australia's go-slow against the West Indies in 1999 (or NZ's go slow against South Africa three year's later that shut Australia out of their own tri-series final). The format used in this year's World Cup does not contain the possibility of such strange incentives, but Adjustment 3 would add that. With an obvious nod to the Gibbard-Satherwaite Theorem and Arrow's Impossibility Theorem, then, let me suggest throwing all of these out the window and instead using the following manipulation-proof tie-breaking formula:

Adjustment 5: Rank all teams leading into the tournament based on recent performances. In the event of two or more teams being tied on points at the conclusion of pool play, their relative ranking will be according to their pre-tournament ranking, fully independent of play during the tournament.

* The ICC might argue that they have addressed the problem in a simpler way by restricting the next tournament to only 10 teams. But the results to date in this World Cup suggest that there will still be some very weak teams and non-competitive matches given the non-competitive process for selecting the 10 teams.

Mao's Basilisk

Bill Kaye-Blake writes:
When I spent a semester studying in Beijing, I met an old man in Tian An Men square who insisted on showing me his identity card. He pointed out that it said he had joined the revolution in 1951 (yes, the identity cards had a field for 'when you joined the revolution'). I later talked to a Chinese friend about the encounter. She said that 1951 was nothing. Her father's card said that he had joined in 1948 -- before the revolution was successful. As a result, he got an extra stipend.
Roko perhaps wasn't as innovative as you might have thought.

Bill's disclaimer:
"it is a 25-year-old memory of an intercultural and bilingual exchange. No express or implied warranty blah blah blah" 

Wednesday 18 February 2015

Occupational licensing: repo edition

Occupational licensing rules block too many Americans from entering protected professions.

Brookings covered some of the horrors back in January:
For example, some states require that florists and make-up artists satisfy expensive and time-intensive requirements before they are legally permitted to perform their jobs. Also subject to such requirements in various states are locksmiths, ballroom dance instructors, hair braiders, manicurists, interior designers, and upholsterers.

This regulatory practice is known as “occupational licensing,” and it has spread to cover around 30 percent of the U.S. workforce, up from just 5 percent in the 1950s. The practice now has a significant bearing on workers of all skill levels, and extends far beyond the occupations of doctors, lawyers, nurses, and teachers. 

It is important to realize that occupational licenses are not mere state-sponsored certificates to signal that workers have completed some level of training; occupational licensing laws forbid people from practicing in their occupation without meeting state requirements. If the rationale for licensing an electrician is to protect public safety, it is difficult to see what rationale supports licensing travel guides. Yet, twenty-one states require a license for travel guides. Among these, Nevada has created the highest hurdle: a person hoping to be a travel guide in that state must put in 733 days of training and shell out $1,500 for the license. 
Their policy paper on it is here.

The Mercatus Center agreed, showing how licensing requirements also push up costs for consumers.

So New Zealand wouldn't be dumb enough to start trying to catch up with America on this front, right?

Associate Minister of Justice Simon Bridges and Commerce and Consumer Affairs Minister Paul Goldsmith have today announced strict new laws that will better protect the public from repossession agents engaging in unscrupulous practises.
“The changes mean that all repossession agents, as well as their employees, must be registered and licensed from 6 June 2015”, Mr Bridges says.
Applications for licenses will be accepted from 6 March 2015.
“Those who breach the new laws can be fined up to $40,000 under the Private Security Personnel and Private Investigators Act”, he says.
Maybe there's a case for going after cowboy Repo people, but why not do it simply by enforcing the rules around lawful repossession rather than setting up a big licencing regime?

Why make labour markets more rigid? Was there any RIS on this?

And today I learned that New Zealand has a Private Security Personnel Licensing Authority, which will be running the Repo Agent licensing.

A safe and proper tournament

The practice, also called courtsiding (it first emerged in tennis), is not illegal, but the gambling markets it serves, mostly in India, usually are. The International Cricket Council (ICC) prohibits it in the fine print of its match tickets and would rather avoid the unsavoury association.
Police help the ICC make sure of it. Specially-trained plain-clothes officers are patrolling New Zealand matches through their mandate with the ICC and the Government to help deliver a safe and proper tournament. Essentially it is the same powers they have in evicting a drunk person, but it speaks of the seriousness with which pitchsiding is treated. All the men kicked out of Hagley Oval on Saturday were banned from other World Cup matches and face arrest if they try to gain entry. Past this, however, they are not in criminal trouble.
So says The Press.

The fine print on the entry tickets to my house note that, as condition of entry, if the guests are there as we put the kids to bed at 7:30 pm, the kids will likely ask them to sing bedtime songs. Some guests have been reluctant to do so, and we've not pressed the issue. But now that we know that the police are happy to enforce general Terms and Conditions of entry, well, that guests sing for their supper will be better enforced.

Seriously, though: what specifically authorises the New Zealand Police Force to go around looking for breaches of ticket terms and conditions? Why did anybody think this was an appropriate use of police resources?

The police lament their resourcing issues when they argue that all the bars should close at ridiculously early hours: Basically, nobody should be allowed to be out late because it makes rostering too hard for the cops. And yet they've time to send plainclothes detectives out to stop people from telling other people that a bat hit a ball?

If the ICC were running the nightclub-bouncer part of the operation, then asking the Police to enforce trespass orders against those they didn't want at the matches, I could understand it. But sending in cops to watch for breach of ticket terms and conditions?

Public intellectuals

Philip Matthews at the Christchurch Press asked me for comment on the role of public intellectuals in New Zealand.
He used a well-chosen excerpt from the email below. Here are the parts for which there wasn't room in last weekend's paper.
“Public intellectuals have to be good academic all-rounders. The best ones combine deep specialist knowledge of their own research area with broad and voracious interest in work outside their main field. They then draw the links between findings in their own specialist areas and those from other fields to provide research-informed analysis both of current policy and of the general state of the world. Denis Dutton exemplified the public intellectual. I’m not a particularly good one.”

“Anybody jumping into policy debates, public intellectual or not, has to have a pretty thick skin. Even if your analysis is entirely correct, somebody will hate the policy conclusion and yell at you about it in Letters to the Editor, on Twitter, or elsewhere. Most policy preferences are not evidence-based but come from deeper affiliations and self-conceptions. I think most people who stick their necks out understand this and can sort informed and serious critique from the noise. The risk for the public intellectual is more when those folks’ colleagues or bosses cannot tell the difference between serious critique and the Twitter mob and consequently panic too quickly about any public controversy.”

“I’ve been pretty lucky. I’m very happy with the support I get at The New Zealand Initiative. I was always supported by the Economics Department at Canterbury when I took on more of a public intellectual role. But in academia, that might be more exception than rule. Denis Dutton’s Arts & Letters Daily was a daily read for me while I was a graduate student in Virginia, half a world away from Christchurch. But it seemed underappreciated at Canterbury, and even unknown to a lot of the people who worked there.”

“Academia should serve as a repository of knowledge, as a generator of new knowledge, and as transmitter of both of those both to students and to the broader public. The current university funding model, through the Performance Based Research Fund, can do a decent job in encouraging the generation of new knowledge, but I think that that has come at the expense of the other two functions. A lot of what we have known about the world is being forgotten as academics specialise ever more deeply into their particular niches. It’s what is needed to land articles in the very top journals, but our history of thought matters too. And while the government has told the universities that it wants funding to recognise research’s impact, by which it means research’s effect in helping to improve the country and the world, it would be pretty surprising if PBRF panels did not choose to interpret ‘impact’ as meaning citation counts in journals few people read.”

“I also think New Zealand’s media does a fine job in supporting the country’s public intellectuals. The worst fate for a public intellectual isn’t having people angry about your ideas, it’s having the ideas be ignored. Academics who know how to write for a broader audience do not really have that hard a time in getting their ideas out into the public arena.”

Tuesday 17 February 2015

Modernising censorship

Broadcasting Minister Amy Adams will be reviewing New Zealand's censorship legislation.

The NBR reports (gated) on the state of play. They rightly note that the legislation makes it very difficult for would-be NZ streaming options: while the NZ services have to get content certified here, those of us using Hola to get US-Netflix bypass the mess. 

Paddy Buckley, managing director of NZ's Quickflix, has a pretty reasonable take, suggesting self-classification with some public oversight body. 

I still think the simplest model would have content providers be able to use any existing US, UK, Canadian rating, along with a note saying which jurisdiction's rating it was using. For NZ-produced content without a foreign rating, self-classification subject to oversight, followed potentially instead by adoption of a foreign rating when one became available, should work fine.

The only real role that should be left for a NZ Censor's office is deciding what counts as kiddie-porn for arresting-people purposes. That too should be defined just a bit more strictly: that Japanese comic books can count seems just a bit too broad. Child pornography should be banned because there is an actual victim who is, in a way, hurt again when that material is re-distributed. When it's just drawings, well, that's not the same thing. 

In that proposed world, instead of having a Censor's Office, there'd be one person, on contract, who could make a quick call - on police request - to determine whether or not something is kiddie-porn. 

The Chief and Deputy Chief Censors of Film and Literature are appointed by the Governor-General by Order in Council made on the recommendation of the Minister of Internal Affairs acting with the concurrence of the Minister of Women’s Affairs and the Minister of Justice. The Chief Censor is Chief Executive.

The Chief Censor and Deputy Chief Censor form the Board of the Office.

The Chief Censor is responsible for the overall administration of the Classification Office, and for the allocation of spheres of responsibility and delegation of powers within the Office.

The Information and Policy Manager is responsible for the Information Unit, including its research, information, complaints and library services.

The Corporate Services Manager is responsible for human resources, administrative and technical support, IT, and finance. The Corporate Services Manager is also the Chief Financial Officer.

The Senior Classification Officers each supervise a team of Classification Officers.

The Chief Censor, Deputy Chief Censor, Information and Policy Manager and Corporate Services Manager form the Office’s Management team.
The Censor's Office costs the government about $2 million per year. But the cost to our freedom in having t-shirts banned, in maintaining a stock of prohibited texts going back to the 60s when homosexuality was de jure obscene, in taking a crazily broad definition of objectionablein abolishing parental discretionin having a potential end-run around legal parallel importation of digital content, in inflicting ridiculous costs on distributors of small-market films, in messing up NZ digital delivery services, in blocking parallel importin making art exhibits difficult and dangerous, that's a bit higher than $2 million per year. And the review office to which decisions can be appealed is, if anything, even worse.

Aggressive Opening Batmen in ODIs

After five games in the 2015 cricket World Cup, an interesting pattern is emerging: So far, the average score of the team batting first has been 323 runs (well above the historical average for ODIs), and has gone on to win the match in four of the five matches, and yet in three of the four cases where the team batting first won, it was the losing team that won the toss and sent the opposition in to bat. Captains are likely to see this pattern and adjust their strategy, but I think that would be a mistake.

One of the interesting things me to watch out for going into this World Cup was the approach taken by both the batting and bowling teams in the opening overs of the first innings.It has become conventional wisdom that in the modern game it is crucial for batsmen to be aggressive from the outset. This view is seen and heard in media commentary, and is revealed as strategy in team selections: After After playing down the order last year, Brendan McCullum has returned to the opening spot along side Martin Guptil, as New Zealand empahsise a high-risk, high-return approach to batting from the outset. Australia are opening with two high-risk, high-return batsmen, and England recently dropped their relatively conservative opening batsmen and captain, Alistair Cook and also elevated the more-aggressive Moeen Ali to the top of the order.

But is this conventional wisdom correct? Obviously, faster scoring is better for a batting team than slower, given the same likelihood of losing a wicket, and conversely less risk is better than more for a given strike rate, but what is the trade-off? Peter Miller, aka The Cricket Geek, has expressed the trade-off as follows:
In many ways, getting out for a 15-ball 30 is less of a crime than 65 off 90 deliveries. 
This captures the essential difference between test cricket (most of the time) and limited-overs cricket. In the former, time is not a constraint, so the key to a large score is to not be dismissed; 65 contributes more to your team than 30 in most circumstances. In limited overs cricket, every ball faced is a ball that is not available to your teammates. The opportunity cost of balls used up has to be weighed against the runs scored. But is Peter's summary of the trade-off correct? As it happens, there is a measure of the opportunity cost of wickets lost and balls used it up that can answer this question exactly. It is WASP. A player's contribution to his team in the first innings is the amount that WASP advances by on the balls that that batsman faces. Let's imagine that an opening batsman is the first to be dismissed having either scored 30 runs and faced 15 of the first 30 deliveries, or having scored 65 runs and faced 90 of the first 180 deliveries. Which option will have advanced WASP by the larger amount? Well that depends on whether the game is played on a high-scoring or low-scoring pitch. In 250 conditions, the more aggressive opener would have had a net contribution of just under 4 runs compared to just over 11 for the less-aggressive player. In 300 conditions, however, 30 off 15 would give a slightly negative contribution, but 65 off 90 a more-negative one. The cross-over point is when the par score is 278 (roughly).

I reckon that 280 is probably about the average par score for the pitches being played on in this world cup (the succession of first-inning scores over 300 are misleading, as in every game so far, the more-fancied team has batted first), so Peter's example is very finely calibrated but correct.

But there is a seeming inconsistency in the conventional wisdom. As the same time that the consensus is that batters need to be attacking from the outset, media commentary is emphasising the importance of early wickets. And again, this appears to be accepted in team strategies. New Zealand has expressed the intention of attacking from the outset, when bowling as well, being prepared to concede runs in the search for wickets. Australia have their bowling spearheaded by Mitchell Johnson who, it is said, may prove expensive but can also destroy a team with early wickets, and so on. That is, the conventional wisdom is both that opening batsmen have to be aggressive from the start and that it is important for bowling team to secure early wickets. But ifthe risk-return trade-off is such that the benefit of quick runs to the batting team makes it worthwhile taking the risk of early wickets, then the reverse should be true for the bowling team. In the numerical example above, while it is true that 30 off 15 is a better contribution than 65 off 90 on a 300 pitch, both contributions are negative relative to the average opening batsman performance.

Actually, the view that bowling needs to be aggressive at the outset is probably closer to the truth than the view that batting needs to be. At the start of an ODI first innings, the cost of a wicket is between 25 and 30 runs, depending on the conditions. As long as a team has wickets in hand, that cost diminishes steadily as balls are used up, and the trade-off between risk and return favours greater aggression. (Of course, balancing that is the fielding restrictions in the first 10 overs, which lowers the risk from fast scoring.)

If this combination of aggressive batting and aggressive bowling/fielding carries through, in the World Cup, I expect to see a high-variance in first-innings scores: some high scores where the aggressive strategy pays off, and some low ones where rapid wickets impose a large cost. In some cases, when a high first-innings score is achieved, the same strategy will pay off for the chasing team; when a low first-innings score is made, the chasing team should always win by being more conservative. For that reason, notwithstanding the results in the first five games, I still believe that the toss-winner should choose to bat second.* Let's see how it plays out.

* The exception to this rule is when a highly ranked team plays one who is much weaker. In this case, the crazy net-run-rate method for choosing between teams with the same number of wins and losses, implies that the better team should choose to bat first, just to make sure that they bat for the full 50 overs and have more weight on that game in the NRR calculations. But that is the subject for a later post.

Moderate drinking is still good for you

Last week brought lots of headlines about a new study claiming moderate drinking doesn't really provide health benefits.

I'd previously reviewed the evidence here, here and here.

The new paper claims to better adjust for sick-quitter confounds by using lifetime never-drinkers as comparison group, but this is hardly a new technique: Rimm and Moats 2007 notably restricted their sample to healthy people who exercised and who had good diets - they found strong protective effects for moderate drinkers as compared to abstainers, even if the NZ MoH wants to pretend otherwise.

Statistician David Spiegelhalter walks through the latest evidence. Basically, there was no power to their test because they had too few never-drinkers in their sample, so nothing came up as statistically significant. He concludes:
So a more appropriate headline would have been "Study supports a moderate protective effect of alcohol".
In summary, the study is grossly underpowered to convincingly prove a plausible protection, and they have committed the cardinal sin of saying that non-significance is the same as 'no effect' in a study lacking sufficient events, in this case, deaths in non-drinkers. Maybe epidemiological studies should include power calculations, which make sure there is a reasonable chance of detecting a plausible effect, and which became standard in clinical trials after too-small studies were being used to claim that drugs did not work.
This is a poor use of statistics, and I am surprised it got past the referees and into the journal. A recent analysis showed that exaggerated health stories in the media were not generally the fault of the journalists, but the press releases they had been fed. Rather ironically, the analysis appeared in the British Medical Journal.
And see Snowdon, here.

How long until New Zealand's MoH starts citing this as further evidence against the health benefits of moderate drinking?

The NZ Cancer Society has been pushing a "no safe level" message around alcohol and cancer risk. As best I understand the literature, cancer risk is always increasing in alcohol consumption. But unless you have a strong family history of cancer as opposed to other things, it ought to be all-source mortality you look to for medical risks. The protective effects of moderate consumption are well established. But there does seem to be some determination to downplay those overall effects while emphasizing the disorders worsened by alcohol.

Monday 16 February 2015


The Press's Cecile Meier on Christchurch's downtown wasteland:
I live in a ghost town. Or, since Christchurch's CBD's population fell from 8000 to just 5000 after the quakes, perhaps I should call it a ''ghosting'' town.
On weekends I drift from street to street in search of company, but all I see are empty car parks, dusty building sites and quiet streets. The few people who do venture into town cluster in a few select spots - New Regent St, the Re:Start and Victoria St at night.
On weekdays there's a little more spirit but it might not be growing fast enough for the early settlers. St Asaph St Kitchen, which had great nachos, has closed and I suspect many other businesses are struggling.
Living in the CBD has lots of perks - you barely need to use your car so you save on petrol, you are close to everything so you don't need to plan for everything in advance and if you don't have a backyard you save time on weeding.
In most cities, you're close to people when you live in the centre.
But in Christchurch that's where you're most likely to be isolated at the moment.
Recall that, in 2011, some bright spark reckoned that because great cities have high downtown land prices, artificially constraining downtown land supply to prop up prices for a while might be a great idea. That, plus Christchurch Council rules making it almost impossible to rebuild downtown, followed by CCDU rules adding to the delays, had everybody re-start elsewhere.

And so Cecile has the place to herself and I'm in Wellington.

More on Courtsiding

Eric is wondering first, what business the NZ police have enforcing ICC ticket terms and conditions regarding "courtsiding" by evicting from NZ cricket grounds spectators who are in violation of the T&C but not breaking any law, and second, why the ICC even wants to crack down on courtsiding. 

Eric, being a public choice guy, considers two reasons why the ICC officials might rationally want to ban courtsiding. I am more inclined to Hanlon's razor, and so here I want to explain why the ICC should be embracing courtsiding. 

Courtsiding, the sending of real-time game information by a live spectator to bookmakers or gamblers overseas quicker than the slightly delayed television feed,  is a kind of insider trading, so let's think about the analogy to financial markets. For all that they occasionally get things seriously wrong with bad consequences, financial markets are on balance a huge force for social good, enabling the efficient matching of savings to productive investment opportunities, and facilitating risk sharing. Less obviously, but still true, speculation is, on balance, beneficial, allowing information to be embedded in prices and letting people make good resource-allocation decisions in their area of expertise without being economic experts as well. This last point may not be self-evidently true to all readers of this blog, but just run with it for now.

Despite this view that speculation is beneficial, we have laws to exclude people with access to privileged information from using that information for financial gain betting on financial markets. The reason for thus is that for speculation to be beneficial, it needs to be competitive. If outsiders feel that they are playing in a rigged game, they will opt out of the market leaving a small group of insiders able to manipulate prices. The case against insider trading is not as clear cut as one might think, but the logic is clear in principal.

Now consider getting on cricket matches. Let's assume that the ICC's objective is to maintain the integrity of the sport (at least as far as games involving India, Australia and England are concerned) not the integrity of gambling markets per se. The analogy to the proscription on insider trading in financial markets then breaks down. The ICC's main concern with gambling on matches, should be the incentive it gives for large payments being made to players to deliberately lose matches or to indulge in spot fixing. If it became well known that the gambling markets were fixed due to things other than player match fixing such as courtsiding, the incentive for outsiders to participate in gambling markets would be reduced, with a corresponding reduction in the financial incentives to bribe players. 

So here is my advice to the ICC: Don't worry about courtsiding; get into the game yourself. And don't do it surreptitiously: Announce to the world loud and clear that you are participating in the betting markets, using real-time information from games, using private information from coaches about hidden player injuries, using information from the professional version of the Duckworth-Lewis formula (which is not in the public domain), etc. Who knows, if you make enough money from this enterprise, you might be able to afford to invite some associate nations to the 2019 World Cup. 

Why does the ICC care about 'courtsiding'?

The Christchurch Press has more details on 'courtsiding' at the Cricket World Cup.

They're describing the folks placing bets based on up-to-date information at the game, as opposed to those on 15 second tv-delay, as "betting cheats". And it says the cops have plainclothes officers at the matches watching for it.
Courtsiding refers to a spectator at an event sending immediate information on game scores and activities before it is broadcast. The delay can be up to 15 seconds and allows people overseas to make spot bets.
Superintendent Sandy Manderson said yesterday that some of the cheats caught at Saturday's game lived in New Zealand. The others were overseas visitors.  
Manderson said plainclothes police trained in spotting courtsiders, as well as members of the public, identified the men.
They were relatively easy to spot because of the technology they used, including cellphones and laptops. 
 "We noticed a number of people courtsiding, pitchsiding or cheating whatever you like to call it," she said.  "Some of them [the cheats] have multiple telephones.
"We've got a list of some people we're watching  ...  We know what to look for." 
The cheats were interviewed, but not arrested. 
Hypotheses about why the ICC might care:

  • The ICC, or its officials in their private capacity, are themselves already betting from courtside, enjoying the information advantage, and don't like anybody else reducing the spread;
  • The ICC reckons that the tv rights sell for a tiny bit less where subscribers pay extra for live feed so they can bet during play; they then are willing to pay less for that live feed if those courtside are updating the prices before they can move.
I'd bet on the first one, based only on that it seems awfully unlikely that overall TV rights diminish that much in value; the punters are going to be inframarginal.