Thursday 31 January 2019

Fun studies for someone else to do: contraceptive access

"While current dispensing restrictions limit how often a person can collect their Levlen ED prescription, this should not stop patients from accessing their medicine or taking it as directed.

"We thank pharmacies and wholesalers for their assistance in helping to manage this stock issue and apologise for any inconvenience," Fitt explained.

Concerns about the availability of Levlen in New Zealand were raised earlier this month.

Recently, pharmacies had been asked to dispense the pill in one-month courses, rather than the three-month courses usually given out.

But on Friday that request will become mandatory as officials step up efforts to maintain sufficient supply until the medication was restocked in late March.
So a fun Masters thesis for somebody: use regional variation in the timing here to check the extent to which the fixed costs of going to the dispensary affects both the likelihood of scripts being filled and unplanned pregnancies. Prescriptions like this should be in Pharmac data accessible in IDI.

I'm not sure what you could do with this second natural experiment though, noted in the same story:
In April, medical professionals were asked to ration prescriptions of Durex condoms for men with large penises, as increased demand contributed to a global shortage.

Durex Confidence 56mm condoms and Gold Knight Larger were the Pharmac-funded brands affected by dwindling supply.

At the time, Pharmac said the Durex condoms would be temporarily unavailable in New Zealand, but the brand's five other varieties in differing sizes were available.

In July, a disagreement between the brand's owner and its Indian partner cut up to 60 per cent of supply.
Of course, condoms remain accessible (at a somewhat higher cost) at the supermarket; it's just the subsidised ones that are short. No non-prescription options for birth control pills.

The Stuff comments thread is more amusing than most.

Wednesday 30 January 2019

Wealth inequality

I go through some of the complications in trying to weigh up wealth and inequality in this week's column over at Newsroom ($).

A few fun (and perhaps surprising) facts:
  • Government provision of some services can increase measured wealth inequality even if they result in no change whatsoever to anyone's lived experience. Converting each Kiwi's NZ Super entitlement into a private account would reduce measured wealth inequality by giving everyone a lump-sum. Converting each Kiwi's health system entitlement into a lump sum transfer into a medical savings account (with government top-up for big events) would have similar effect. 
  • Stats NZ's data shows median wealth increased from 2015 to 2018.
  • Credit Suisse data has half of all adults in the global top 10% for wealth - and showed a drop in NZ's wealth Gini coefficient from 2015 to 2018. 
  • On the Credit Suisse Gini, NZ sits midway between France and Canada; on the OECD's measure of the share of wealth held by the top 10%, we're below Denmark, the Netherlands and the US, roughly on par with Canada, France, the UK, Ireland and Austria, and more concentrated than Japan and Italy. We're also more concentrated than Australia - but remember that Oz has greater reliance on private retirement accounts.

Red meat tax?

Boyd Swinburn's group wants rather a lot more controls on what we all get to eat. 

Radio NZ covers his report here; Chris Snowdon's summary of it is best.
The lead author of the report is Boyd Swinburn, a New Zealand doctor and food campaigner who declared last week on Twitter that the EAT-Lancet report shows where diets need to get to while his report shows how to get there. They are two sides of the same coin and whilst there is no shortage of policy suggestions in the EAT-Lancet document, including rationing and the outright prohibition of certain food products, the Lancet Commission takes it a stage further by calling for a global treaty.

Swinburn is obsessed with the web of corporate interests he sees all around him, thwarting his efforts to get the public to eat their greens. In 2017, New Zealand’s Ministry of Health commissioned the New Zealand Institute of Economic Research to look at the pros and cons of taxing sugary drinks. When the economists concluded, accurately, that ‘the evidence that sugar taxes improve health is weak’, Swinburn wrote a furious article denouncing ‘economists steeped in last century’s economic theories’, ‘merchants of doubt’ and the ‘vested interests of the food industry’. It is a theme he returns to with tedious regularity in the Lancet report.


Swinburn et al. seem to believe that the only barrier to governments leaping headlong into an extensive systems of taxes, warnings, bans and restrictions is ‘Big Food’. Whilst it would be naive to think that the various food lobbies have no influence on government policy, the authors never consider the possibility that this is because the industry’s arguments about trade, jobs, choice and prices appeal to politicians and, ultimately, to the public. ‘Big Food’ may not want tobacco-style regulation, but it is a logical fallacy to infer from this that politicians who reject such an approach have only done so because of ‘powerful lobbying’.

Whether or not the authors actually believe this narrative, it serves two useful purposes. Firstly, it allows wealthy activist-academics in the multi-billion dollar ‘public health’ industry to view themselves as plucky underdogs fighting Goliath. Secondly, it absolves them from answering difficult questions about whether their demands are reasonable, fair, or even realistic
Do read Snowdon's whole piece. Stuff has some of the government's response:
Associate Minister of Health Julie Anne Genter​ said the Government did not plan to tax red meat "at this stage", but an increase in awareness about climate change was affecting people's behaviour.

"Obesity and climate change are often framed as problems for individuals to change. This report shows it has been a failure of public policy and we need government action to protect our health and our climate."

The commission called for a global treaty, like those established for climate change and tobacco, to help governments restrict the influence of the food industry on policy and the establishment of a global philanthropic fund of US$1 billion (NZ$1.46b) "to support social movements demanding policy action".

The Lancet editor-in-chief Dr Richard Horton said the business model of large international food and beverage companies led to over-consumption of junk food in both high-income countries and, increasingly, low and middle-income countries.

Genter said she was "interested to learn more about how a global treaty would work, as politicians need to play their part too".

Swinburn said the food industry should be excluded from the "policy-making table" as the profit motive would always win out over improving health and reducing climate change.
There's a very good case for agricultural emissions globally coming under emission trading schemes or carbon taxes. In the absence of international coordination, the case gets tougher because you have to worry about whether production gets displaced to places where meat production is more carbon-intensive. Animal product prices would go up after agricultural emissions were included in the ETS, or in carbon taxes, but it would be a mistake to call that a red meat tax. It's more like, if you had a GST that excluded food products, getting rid of the exemption isn't a "food tax".

Going beyond that though, to tax and regulate and nudge and force everyone into eating and drinking only Boyd-Approved products - no thanks.


Tuesday 29 January 2019

Reader mailbag - Licensing trusts edition

Karl du Fresne had a great 2017 story on New Zealand's anachronistic alcohol licensing trusts.

The West Auckland trust is coming under a bit of pressure from a residents' group that would like to see things opened up, removing the trust's monopoly.

TrustAction's Nick Smale writes to let me know what they've been up to:
I believe most of the licensing trusts' public support results from misinformation and misunderstanding. I've been surprised and disappointed with the actions of both our licensing trusts and our local public health service (ARPHS) in informing the public. For example, the Advertising Standards Authority recently found against The Trusts for making claims about alcohol related crashes. Also attached is a flyer published by the ARPHS which I think is effectively campaigning on behalf of The Trusts.

As a group of non-expert residents advocating for change, we feel somewhat overwhelmed by the public resource being used to support the status quo.
The Auckland Regional Public Health Service has been campaigning to keep the trust, at least according to their flyer Nick passes along.

For those of you living in West Auckland, here's the petition against the Trust's monopoly

Monday 28 January 2019

Afternoon update

The worthies of the afternoon closing of the browser tabs:

Monday 21 January 2019

Oxfam - again

Every year, Credit Suisse puts out its October report on global wealth.

Every January, Oxfam releases a gloss on that report. Every time, the policy recommendation is the same - tax wealth.

The Dom Post's Tom Hunt went for Oxfam's bait this time round. It was a bit frustrating because Oxfam didn't have its report up on its website until this afternoon; Hunt's story was on the Dom's front page first thing in the morning. Hunt's headline: Rich richer, poor poorer (at least on the print edition).

The only mention of New Zealand in the Oxfam report is in a note that Oxfam NZ is a local partner in the report. But their data comes from two sources. They use Forbes' rich list (why not NBR's if they actually want anything local?), and Credit Suisse's October report.

What do we find in the October Credit Suisse report? Currency movements. Total NZ wealth dropped from $1,037 billion USD last year to $1,010 billion USD this year - in current exchange rate terms. At constant exchange rates, wealth instead increased from $995 billion to $1,053 billion.

Recall that middle-wealth households have disproportionate amounts of wealth tied up in their houses. If the exchange rate moves, their reported wealth in USD terms will drop. Recall that richer households have more substantial financial assets (relative to their housing assets) and will be diversified. They're hit less by exchange rate changes. So when the exchange rate drops, it looks like richer households are hit less than poorer households. The report notes a -7.2% change in the value of the NZ dollar against the US dollar.

What else can we quickly see in the Credit Suisse report? The Gini coefficient for New Zealand, this year, is 70.8. Last year it was 72.3. That's the opposite of Hunt's headline. I think that headline came from Forbes' figures on the two richest people in New Zealand rather than from the more comprehensive Gini stat. A headline coming out of the Credit Suisse report could easily have been "Wealth Inequality Drops". But that isn't the story Oxfam wants to tell, and nobody at the Dom seems to have checked the source data.

I can't be bothered turning Credit Suisse's PDF into a Google Sheet this go-round; the drop is equivalent (against last year's data) to moving six places in last year's ordinal rankings.

What else is in there?

Since 2000, the start year of their data, median wealth per adult increased from $26,933 to $101,718 last year to $98,613 this year; mean wealth per adult went from $71,632 to $300,988 last year to $289,798 this year. So the median is 3.7 times higher than it was in 2000 and the mean is 2.9 times higher than it was at the start of the period. Both mean and median wealth dropped from last year. So another headline could have been "New Zealand is poorer (but it's mostly currency movements)."  Note that these numbers vary substantially from last year's go round - the base figures are different than they then were. I assume that they've updated exchange rates but I don't really know.

New Zealand now has 1,725,000 adults with more than $100,000 USD in wealth, and 155,000 with more than $1,000,000 USD in wealth. Again, owning a house in Auckland mortgage-free gets you pretty close to that million dollar mark. But twenty thousand fewer Kiwis make the cut for the global top 1% - we're on the list of the world's biggest losers in that category. So another headline could have been "Far fewer Kiwis among the global elite - and wealth inequality is down too."

Pretty much the whole country is in the world's top 3 wealth deciles - or at least the number of Kiwis falling into the lower deciles rounds down to zero when calculating our share of those global wealth deciles. We have 0.4% of the world's top 10%, top 5%, and top 1%. We're 0.2% of the global 9th decile, 0.1% of the global 8th decile, and rounding error below that. So another headline "All things considered, we're pretty wealthy."

Anyway, go look at the Credit Suisse report for yourself. Journalists should be a bit less credulous about Oxfam's reporting on the figures, especially where Oxfam pulls this exact same stunt every year. Hunt paints a picture of wealthy Kiwis getting richer and poor Kiwis getting poorer. The Credit Suisse figures instead show we all got poorer (and wealth inequality dropped), but that it's mostly changes in exchange rates.

I like my headlines above better than the one the Dom picked for Hunt.


Friday 18 January 2019

Ration books

The IEA's Chris Snowdon tries to live by the ration book that The Lancet's public health people would impose on the UK.

First up, the recommended diet, from page five of their report.

I like that they have a 31 gram ration of sweets.* 

Anyway, Chris does his best. But it doesn't look all that appealing. 
Here's breakfast:
And lunch
And, finally, dinner for a hungry Chris.

As Chris points out, it's nice that this crowd has outlined an end-goal for once rather than the series of nibbles that always otherwise come with denials that there's a next step just around the corner. The report recommends measures like zoning bans on unhealthy food outlets, taxes and subsidies, reduced choice, reduced portions - and some non-daft things like finally getting water and effluent pricing right. But they have the whole thing back-to-front. 

Food choices shouldn't be targets. They should be the outcomes that emerge when distortionary subsidies are removed and when environmental effects are properly worked into prices. I'd be surprised if models that appropriately incorporated full environmental costs didn't result in changes in those choices. But you don't force it by nudges and shoves to get particular menus; you just make sure that prices incorporate costs properly and let people make whatever choices they want within that. 

* We can thank them for increasing the chocolate ration from 20 grammes to 30. 

Drug convictions

The Drug Foundation's State of the Nation 2018 report has some nice stats that aren't typically seen all in one place. Here are drug convictions. 6000 per year in a country of 5 million seems high.

Thursday 17 January 2019

Health and heritability

Public health puts a lot of weight on SES in explaining disease. I don't think it's a strawman to generally characterise the field as arguing for sharp increases in redistribution to improve health outcomes.

Lakhani et al used ACS and health insurance data (724,513 sibling pairs; 56,396 twin pairs) to tease out the relative contributions of heritable factors, shared environment, and socioeconomic status across a whole pile of disorders; it's in Nature: Genetics.

Here's a decent write-up.

They also put up a great site letting you look at the relative contributions over a range of disorders.

Here's what things look like for morbid obesity. h2 (green bar) is genetics. c2 (peach bar) is shared environment, adjusting for SES factors. SES (small purple bar) is SES.


Wednesday 16 January 2019

Afternoon roundup

This afternoon's worthies on closing out the accumulated browser tabs:

Tuesday 15 January 2019

What should Knightean economists do?

Although Milton Friedman and Arnold Harberger became involved with Pinochet's Chile in the mid‐1970s, an increasingly influential body of scholarship argues that James M. Buchanan was similarly eager to provide Pinochet's dictatorship with advice. Buchanan reportedly had a heavy influence on the development of Chile's 1980 Constitution and similarly helped to design Chile's binomial electoral system. Buchanan's seeming willingness to advise Pinochet's dictatorship provides a stark contrast to his longstanding advocacy of Frank Knight's view that democracy is “government by discussion” and Buchanan's oft‐repeated insistence that democratic consensus trumps economic expertise. This article draws upon a wealth of largely ignored archival evidence and Chilean primary source material to engage and evaluate whether Buchanan—a Knightian economist par excellence—abandoned his advocacy of “government by discussion” and provided early 1980s advice that helped Pinochet's regime of “institutionalized terror” (Valdes 1995, p. 30) design a constitution that would chain any subsequent Chilean democracy.
So what happened?

Buchanan was invited by the Dean of Universidad T├ęcnica Federico Santa Maria Business School, Carlos C├íceres, for the school's 25th anniversary.
Although Buchanan subsequently told C├íceres that the “tentative arrangements that you suggest for the visit seem fully satisfactory to me” (February 25, 1980), there is no evidence to indicate whether Buchanan was initially aware that C├íceres was a member of the Council of State—an advisory body created in early 1976—which met between November 1978 and July 1980 to review the earlier Anteproyecto de Constituci├│n Pol├ştica (Preliminary Draft Political Constitution) that the Ort├║zar Commission had submitted to Pinochet in October 1978 (Barros 2005, p. 174).

MacLean (2017) suggests that the “wicked genius of Buchanan’s approach to binding popular self-government was that he did it with detailed rules that made most people’s eyes glaze over” (p. 159). By contrast, the relatively brief set of outline notes that Buchanan drafted shortly before he traveled to Chile signify that Buchanan thought it “Difficult to know what to talk about … [but I] Propose to do more or less what I did at a lecture in Lisbon, Portugal in November, 1978 … [i.e., provide a] general summary of ‘An Economic Theory of Political Constitutions’” (Chile Lectures 04/28/80, BHA). Although Buchanan noted that “My own work has been, and is, in this, also relevant to Chile (as to Portugal). … ‘Politics without Romance’ … Stick to constitutional issues” (p. 1), he similarly noted the “Influence and importance of Wicksell (on me, on others) … Top rank … Wicksell’s warning to economists [i.e., not provide policy-advice] … Look instead at institutions. How they work” (BHA).18

According to MacLean (2017), Buchanan provided his Chilean hosts with a wealth of
“detailed advice on how to bind democracy, delivered over the course of five formal lectures [Buchanan only gave four lectures to Chilean audiences] to top representatives of a governing elite [e.g., the undergraduates at UTFSM] that melded the military and the corporate world” (pp. 158). In particular, MacLean’s (2017) narrative places much weight on Buchanan’s May 8 lecture to the approximately 250 “government representatives, business people, university professors, and executives” (Que Pasa, May 1980, p. 17) who attended the “Open Lecture and Panel” on “Economics and Public Choice.”

Buchanan’s draft lecture notes (initially written for his May 5 lecture to UTFSM undergraduates and barely revised before he gave his subsequent lecture at the Hotel Carrera Sheraton) signify that his May 5 and May 8 lectures—both titled “Economics and Public Choice”—provided his UTFSM and Hotel Carrera audiences with a substantively identical and fairly basic overview of public choice and constitutional economics.19 Similarly, Buchanan’s notes for his May 6 lecture at the Chilean Naval Academy show that he provided his audience with a basic outline of public choice theory and welfare economics which included a brief overview of the “History” and “development” of the theory of rent-seeking (“Tullock, Posner, Krueger … Export licenses, import. Turkey, India”) and a basic account of the theory of bureaucracy provided by “Tullock, Downs, Niskanen … Bureaucrats and budgets—government growth” (BHA).20
Farrant goes on to note that while MacLean holds Buchanan responsible for Chile's binomial electoral system, "To my knowledge, Buchanan never wrote anything about the binomial electoral system over the course of his lengthy career, and he similarly appears to have made no mention of binomial representation in any of his May 1980 lectures in Chile."

I took Buchanan's Constitutional Political Economy course in 1999 and every graduate course in Public Choice on offer at GMU in the late 1990s and early 2000s. I went to pretty much every seminar at Buchanan House and at the Public Choice Center while there. I don't recall ever having heard the term 'binomial electoral system' before Farrant's article.

C├íceres was certainly no democrat, as Farrant shows. But it looks like C├íceres understood neither Buchanan's work on democracy, nor his constitutional views. And Buchanan's talks had little influence on the constitution then adopted:
Ultimately, the evidence signifies that Buchanan provided his various Chilean audiences with a series of lectures which were substantively similar to the analyses that he provided for any other late 1970s or early 1980s audience. Similarly, the evidence suggests that Buchanan’s May 1980 visit did not particularly influence the subsequent drafting of the Chilean Constitution.
And Buchanan learned a bit about Chile as well:
Ultimately, C├íceres and Ib├í├▒ez appear to have had scant grasp of the individualist-constitutionalist-contractarian-democrat—“terms that mean essentially the same thing to me” (Buchanan 1975, p. 7)—tenets of Buchanan’s social philosophy and political economy. As noted earlier, however, Buchanan self-confessedly had little knowledge about the Chilean economy, and he began his May 8 lecture at the Hotel Carrera by providing his audience with a relatively brief summary of his “Week” in Chile. In particular, Buchanan told his audience that he had “Learned more than you have,” and he subsequently told C├íceres that “As I said several times, I learned a great deal” (Buchanan to C├íceres, May 12, 1980). Importantly, Buchanan appears to have learned
much about the anti-democratic views of his Chilean hosts. Indeed, when Buchanan subsequently visited Chile in late 1981, he provided his MPS audience with a steadfast defense of universal suffrage, and publicly upbraided a number of European and South American MPS advocates of the “na├»ve belief that dictatorships are the only or the best way of establishing a free economy.” Similarly, Buchanan told his MPS colleagues—C├íceres and Ib├í├▒ez included—that the MPS had a “moral obligation” to “look for ways of improving democracy” (El Mercurio, November 22, 1981, p. D4).56
The whole article's well worth reading. Here's a Sci-Hub link. Hayek's views on Chile were not admirable, and are discussed.

Farrant concludes:
Consequently, I ask how an advocate of Knight’s view that democracy is fundamentally equivalent to “government by discussion” might best respond when they receive an invitation to visit a country ruled by a dictator. The easy answer is “not go,” but Buchanan accepted Carlos C├íceres’ invitation and subsequently visited Chile in May 1980. Thus I ask what exactly does a self-avowed Knightian economist do when they visit a country ruled by a dictator.62 Do they provide policy advice? Do they meet with the dictator? Do they design a constitution? The available evidence suggests that Buchanan’s answer to the “Frank Knight—dictatorship” question was to do exactly what he would do in a late 1970s classroom in Blacksburg or lecture hall in London.

Monday 14 January 2019

Good character?

National's associate health spokesman Shane Reti said medicinal cannabis manufacturers and employees should be "fit and proper persons".

National has proposed clean slate legislation requiring no terms of imprisonment and no convictions for seven years for employees, and even tougher standards for licence holders including no associations with gangs.

"The industry was adamant that it understood the need to be absolutely squeaky clean in this new industry and they were up for that," Reti said.
David Farrar suggests it is appropriate that those in the industry have no convictions within the past seven years.

I keep saying the best approach to cannabis legalisation is to look at alcohol and see whether the rules there would work for cannabis. For alcohol, a license applicant's suitability matters:
Suitability of an applicant may take into account: business or industry knowledge to effectively operate a licensed premises; recent experience in the industry; criminal history, association with undesirable people, or previous behaviour relating to the sale of alcohol. Suitability of the applicant is an issue that Police considers in the investigation of licence applications as it has access to information not generally available to the public. However, community groups can provide information that may not be available to Police.

Where an existing licence is being renewed with no changes to conditions, the suitability of the applicant will be the only ground for objection.
I would expect that this, applied to cannabis, should mean that people with current gang affiliations would not be deemed suitable, that those with criminal histories not relating to cannabis would not be deemed suitable unless they had cleaned up their act, and that those whose prior offending related only to the sale, supply, or possession of cannabis should be deemed suitable. I would also expect that the licensing authority would weigh things up as a whole for any applicant.

So I would hope that someone who had a criminal record as a drug dealer would not be excluded from being a potential licensee. Otherwise, I'd hope that the licensing authority just uses the same kind of criteria it uses when deciding on alcohol licensees. A new licensee's prior expertise with cannabis should count positively, rather than negatively, in that evaluation.

It would be manifestly unjust if those who have been most harmed by prohibition were locked out of a newly legal industry in which they have developed some expertise.