Showing posts with label Seamus Hogan. Show all posts
Showing posts with label Seamus Hogan. Show all posts

Thursday, 20 November 2025

Seamus and I were wrong

Back in 2012, Seamus Hogan and I were ...mildly sceptical... of proposals to build a giant convention centre in Christchurch.

Seamus wrote:

The convention centre: Eric has written on this, but I can't resist adding my voice. This is why the stadium doesn't upset me so much. The stupidity pales into insignificance compared to the silliness of building a purpose built facility from scratch that is able to host up to three conferences simultaneously. (Aside: from my limited experience with organising conferences, if you have choice over location and date, you choose somewhere where you will be the only conference operating at the time.) The conference centre should be small close to hotels and the performing arts centre so that larger affairs could spill out to those areas.

The bit I'd written on it, in a post titled "What am I missing?", was after one of our regular lunchtime chats in the econ department lunch room. So it owes a fair bit to that discussion with Seamus: 

The Press reports that the Christchurch Convention Centre was insured for $30m but that like-for-like replacement would cost $60m. Whatever external benefits come from holding conferences in town are mostly internalised by the local hotel and restaurant industry; solutions letting the convention centre build internalize those external benefits helps ensure an efficiently sized convention centre. Here's one way of doing it, conditional on Council wanting a convention centre.

  1. Council buys options on a few appropriate sites around town.
  2. Council gets in touch with the big hotels to tell them that Council's going to build a much smaller convention centre for $30 million, but that they want to site it so it can be linked by skywalks* to adjacent blocks if the hotels want to be linked to it. If the hospitality industry really wants a bigger convention centre, they can come back with a proposal where the hotels fund an expanded facility. But even with a smaller convention centre, they can still host big conventions by holding plenary sessions in the big convention centre facilities and having breakout sessions in the different connected hotels' conference rooms. 
  3. Figure out the set of sites on which you have options that best suits the set of hotel partners. The hotels buy the options off Council for their parts of the build.
  4. Exercise the options and get on with it. Make sure there's room on the site to put a few restaurants; put restaurant provision up to competitive bidding so that any rents from conventioneers get capitalized into the purchase price and help fund the place, internalizing the external benefit. 

Now I know what I was missing: the true chutzpah of Christchurch. 

Christchurch, I am in awe. 

We were totally right that the thing would be a white elephant that couldn't cover its costs. We were worried about them spending $60m on a new one; the one they got cost $475 million and lost $3.4 million last year. Its visitor numbers hare dropping too. 

But just look at this.

The ownership question is more tangled than it first appears.

An early, “in principle” version of the 2019 Global Settlement between Christchurch City Council and the Crown talked about the council being best placed to own Te Pae and provide strategic direction for the city’s venues.

But that language did not survive into the final agreement signed later that year.

So the city was cagey about being willing to take ownership while making sure that it didn't sign anything saying that it would. 

Good move that. Then:

The Te Pae clause now simply records that the convention centre would be delivered, and that “the parties may continue to engage on future ownership of Te Pae as appropriate”.

The Christchurch City Council said it had already looked hard at taking the asset on, and decided against it.

“After due diligence the council decided not to pursue ownership,” head of facilities and property Bruce Rendall said.

Infrastructure Minister Chris Bishop, one of the shareholding ministers in CID, said the Government was “open to proposals for Christchurch City Council ownership of Te Pae in the future”.

Emphasis added. I'm reminded of Bart Simpson announcing that he would resign, undefeated, from the world of video boxing. 

So. Option for the Crown at this point would be to threaten to mothball the thing rather than continue to subsidise it. I don't think they can force Council to own it. 

And Christchurch always has the option to offer to agree to take on ownership in exchange for concessions on other margins where central and local government negotiate about things. 

Even evil genius needs recognition. 

As a bit of fun, I asked my advisor to imagine it were a consultancy like Cameron Partners asked to prepare a report on the likely sale value of the thing if it were offered to market. 

As a going concern without ongoing subsidy, the Crown could expect to have to pay someone about $90 million to take it, assuming that the venue could be scrapped in 30 years for its land value. 

If instead the owner could demolish and put up something else instead (while paying break fees with the operator), the site might be worth $55 million.

Both $-90 million and $55 million are considerably less than the $352m asserted book value of the building, which is considerably less than the $475m build cost. 

A huge up-front and ongoing waste of course. But consider the evil genius here too. That's worth something. 



The conversation with my advisor is here, for those keen on that sort of thing. The opening snippet:

In straight commercial terms, Te Pae as a convention centre is not worth anything like its $360m book value to a private buyer. On realistic assumptions:

  • Highest bid is likely to come from a “scrap + redevelopment” buyer, not a buyer keeping it as a convention centre.

  • A plausible order‑of‑magnitude sale price for the site in that scenario is around NZ$50–70m net of demolition and contract break‑costs.

  • As a going concern with no ongoing subsidy, the facility’s value to a private buyer is zero or negative (you’d effectively need to pay someone to take it).

  • To get a positive price for Te Pae as a going concern, you’re looking at an ongoing subsidy of roughly NZ$8–10m per year over decades, assuming current trading patterns.

Posted by Eric Crampton at 18:16:00 0 comments
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Thursday, 10 September 2015

Seamus Hogan - NZAE Obituary

I have copied below the obituary for Seamus Hogan that I wrote for the current issue of Asymmetric Information, the NZAE's newsletter. It will eventually also be available here; look for the August 2015 edition.

Seamus Davie Hogan, newly elected President of the New Zealand Association of Economists, died of a brain aneurysm on 17 July, aged 53. He is survived by his wife, Sarah, and their children, Emma, Liam and Flynn.
Seamus was a Canterbury economist. Born and raised in Christchurch, Seamus completed his undergraduate and Honours training in economics at Canterbury in 1985 and there began his doctoral work under Richard Manning. When Manning left to Chair the Economics Department at the State University of New York in Buffalo, Seamus followed him and completed his doctorate in 1989. He then took up an Assistant Professorship at McGill University in Quebec where, with co-author Chris Ragan, he completed a series of papers modelling labour markets. More importantly, he there met Sarah.
Seamus advanced to Associate Professor at McGill before moving to Ottawa. There, Seamus served as Principal Researcher with the Bank of Canada and as a research unit Director with Health Canada, before moving to Canterbury where Seamus took up a Senior Lectureship in 2001.
The Economics Department was then building out of long slump. The Department, from the 1980s through the mid-1990s, had been unable to hire to fill standing vacancies. By 1995, the Department had dropped to seven economists plus two fixed-term appointments. Rebuilding began slowly in 1996. With the hiring of Seamus Hogan and Ken Carlaw in 2001, the Department had grown to twelve, though there had been much turnover. Frank Tay’s history of the Economics Department identifies the Department’s real turning point at 2001, with Les Oxley’s appointment and Headship.
Seamus provided support to Les Oxley’s Headship, and to John Gibson’s subsequent Headship from 2005. Oxley ran the department as a participatory democracy with strong roles for standing committees. Seamus’s long history with the Department, his willingness to provide departmental and university service, and his adept familiarity with the university’s regulatory arcana proved critical to the Department’s strong performance in the 2000s. Seamus spent much time as head of the Teaching Committee before his later term as Head of Department.
With the Department having been able to improve its staffing complement, more mass-market courses could be offered. Seamus helped to ensure the continuation of the rigorous calculus-based intermediate microeconomics offering as the intermediate course was split into honours-bound and majors-oriented streams, and during the subsequent semesterisation of both courses. He also greatly assisted the Department’s navigation through the Faculty’s creation of core requirements in the Commerce degree.
Seamus had been a student during the Department’s lean times in the early 1980s and had maintained connections with the Department during its worse times in the 1990s. He consequently understood the importance of building a strong, collegial environment. In his Headship, he continued the management tradition established by Oxley.
For all of his importance in ensuring a steady and foresighted hand on the Department’s administrative tiller, Seamus will be most remembered at Canterbury for his contributions to the teaching programme. Seamus taught the core calculus-based intermediate microeconomics course during all but two years of his appointment at Canterbury; while he was on sabbatical, his stand-ins, me and Andrea Menclova, knew better than to deviate from the programme that Seamus had established.
Nearly every one of the 50 to 100 students annually taking the calculus-based intermediate microeconomics course was taught by Seamus, and Seamus knew each of them by name. He was more than generous with his time, offering near-compulsory office hours and extensive course and programme advice in addition to lectures and tutorials. Nobody could better help a student best navigate the intricacies of double-degree or double major programmes. And he actively supported the Economic Students’ Association.
Seamus complemented his intermediate microeconomics offering with a graduate-level course in welfare economics which produced a disproportionate number of the junior economists later hired on at the Reserve Bank and Treasury. His graduate elective course was taken by almost every honours student during the years it was offered. Some especially perspicacious honours-bound students who anticipated Seamus’s sabbatical leave would take his graduate offering while in their third year to avoid missing out.
Seamus’s courses embodied what seemed to be at the core of Canterbury economics. It combined a rigorous technical approach with a focus on the economic intuitions underpinning the modelling decisions. That, together with a strong appreciation for the institutions within which markets operate and the moral presuppositions underpinning welfare analysis, built a cohort of students of which Canterbury can be exceedingly proud.
Seamus’s enthusiasm for the students was irrepressible, and was reflected in a College teaching award in 2011. It also played a role in his promotion to Associate Professor. But it is better reflected in the tributes paid him by his students at the memorial website established by his family.[1]
Seamus loved economics and loved teaching economics to others, whether students or colleagues. His interests were broad-ranging. Despite the department’s rather disparate research interests, we all could, and did, seek Seamus’s advice on our papers. Seamus’s lectures invited students to join in the fun inherent in economics. It was impossible to know him and not share in it. When Seamus provided us copies of his exams for proofreading, he was not really looking for error correction – his errors were few. He was inviting us to share in the fun he had created for the students. It was play.
When the external review committee established to re-assess the Department in light of post-earthquake budgetary pressures deemed, in 2014, that Seamus’s intermediate microeconomic offerings were surplus to requirements, it hit Seamus, me, our students, and many of our colleagues very hard. In prior eras, budget constraints were accommodated by restricting course offerings to the core theory fundamental to the training of new economists. This review instead cut core theory while maintaining the less rigorous intermediate path.
Seamus’s last year at Canterbury was not a happy one. I left the Department in July of 2014 to join the New Zealand Initiative, a Wellington-based think-tank. Seamus left the Department at the end of the year and joined me in Wellington, taking up a position as Senior Lecturer in the School of Government. The Economics side of the Department of Economics and Finance at Canterbury currently stands at nine, including two senior tutors. Before the earthquakes, we were twenty.
It is particularly tragic that Seamus’s death came so soon after his family moved to Wellington. Family was always especially important to Seamus, and that he had imposed such a cost on them did not sit well with him. But it is difficult to imagine Seamus existing far from the lecture whiteboard. Seamus’s death came just as the Hogans had re-established themselves after a particularly difficult year.
In policy circles, Seamus was best known for his work in electricity market regulation and for his blogging at Offsetting Behaviour, where he co-blogged with me.[2] Outside of academia, Seamus was best known for his work with his doctoral student Scott Brooker in creating the Winning and Score Predictor, the WASP now well familiar to cricket fans around the world. The WASP emerged from work Seamus and Scott undertook for New Zealand Cricket to improve batting performance.
Seamus was also well known in Christchurch music circles. While a student, Seamus played with the Christchurch Symphony, as both of his parents had. He played violin with the Resonance Ensemble under conductor Mark Hodgkinson. He also served on the board of the Christchurch School of Music to assist during the difficult post-earthquake period.
The economics community will miss Seamus’s commitment to service, to scholarship and to students. The Association has lost its President. And many of us have also lost someone whose quiet advice made us better economists.

Posted by Eric Crampton at 12:09:00 0 comments
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Tuesday, 28 July 2015

A Hogan Compendium

Here's the complete list of posts by Seamus Hogan. Blogger doesn't make it easy to sort things by author, so I've just pulled them all into this post. I've bolded some of my favourites. They're sorted by category, then by date, with the most recent ones first. If I've missed any, let me know.

Cricket and Sports Economics:
Capital Gains Taxes. Seamus's argument against capital gains taxes, as best I'm aware, remains unanswered by NZ's CGT proponents.
Electricity markets
NZ Policy and Politics more generally.
Housing
Economics
The move to Wellington
The merits of the programme-that-was at Canterbury
Oh, Christchurch.
Miscellany
It all counted for, as Seamus might have put it, three-fifths of five-eights of bugger all for PBRF, but there's some great stuff in there.

And I will particularly miss his habit of emailing me pointing out errors in posts I've had in draft. I'll have to rely more heavily on post-posting review by readers leaving comment.

My NBR column on Seamus is here; the post of 18 July is here. His family are collecting memorial notes here. 

And here's Seamus's lecture on cricket, economics and the WASP.

Posted by Eric Crampton at 11:27:00 0 comments
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Friday, 24 July 2015

In praise of academic paternalism

I've used this week's New Zealand Initiative column at The NBR, in part, to pay a little tribute to Seamus, whose funeral is today. 

I start out in The NBR piece by critiquing the ever-trendy push to abandon the standard economic curriculum in favour of critical theory. 

Unfortunately, at least some higher-ups in NZ academia think it a grand idea. One might suspect that social pressure among some of their colleagues makes having market-friendly economists around somewhat embarrassing for them. 

But there's also a sense that it might boost student numbers if we catered to students' innate preferences rather than trying to provide an education. Customer choice is important, but we abandon what it means to be an academic department if we drop core theory in favour of the flash-trendy feel-good. Paternalism is needed in academia because the students don't know what they need until they've studied it. It's the academics' job to keep abreast of what's important and to make sure that students are getting the training they need, regardless of what they think they want when they start the degree. If they want a degree in mush-headedness, there are plenty of other departments willing to provide certification in it. 

And from there, I talked about Seamus's contribution:
For the eleven years I taught in Canterbury’s economics department, we provided what I think was the country’s best technical training in microeconomics. That was due, in no small part, to my good friend, and then-colleague, Associate Professor Seamus Hogan.
Seamus died last Friday, aged 53, of a brain aneurysm.
Seamus trained a generation of Canterbury economists. His intermediate-level course in microeconomic theory gave every student the technical background they would need to understand either mainstream problems or those coming from the fringes. His honours-level capstone course built on those foundations to show students the cases in which the standard model worked, the cases in which it didn’t, and the ethical presuppositions of different frameworks. In highlighting just what was meant by an efficiency norm, it was deeply critical of parts of the mainstream consensus. But it simply could not be done without the technical and mathematical apparatus established earlier on.
To put it tritely, you can’t think outside of the box unless you understand the box very well indeed. Sure, you can stand on the fringes and yell about the evils of neoliberalism, as many of those re-tweeting Parker’s article like to do, but your critique will be as empty as Jenny McCarthy’s condemnation of vaccines. Seamus taught his students to build the boxes and then twirl them on their index fingers.
Seamus’s students knew how lucky they were to have received proper training in economics with him, rather than a Post-Autistic-styled curriculum. A memorial webpage is already filled with their tributes. One of his students, who spent time at the Reserve Bank before heading off for a doctorate at Berkeley, rightly identified him as the “key factor in making Canterbury economics graduates so well represented in Wellington.” Seamus set and maintained the rigorous academic culture in the department that would not compromise the quality of the teaching programme and that would not pander to trendy, but ultimately fruitless, critiques of the mainstream.
Being able to understand the standard framework matters because so much is built upon it. 
...
Earthquakes brought budget cuts. Scepticism of the value of rigorous theoretical approaches relative to Manchester-style critiques meant the end of Seamus’s courses, despite their popularity. Seamus died six months after moving his family to Wellington, where he had joined Victoria University’s School of Government.
Academia needs a little paternalism. The tributes of those who have gone through the courses should count for more than the whims of those who do not yet know better, and now will not get the chance to.
I'm back in Christchurch for the day serving as pall-bearer and will say a few words in memorial at the service.

Some in the Department at Canterbury have set up a GiveALittle page accepting donations towards the continuing education of the Hogan kids. I'd be surprised if Seamus hadn't adequate life insurance, as he was one of the most ridiculously conscientious people I've known, but if it feels good to help a little, hit the link. I've suggested that it be put towards continued musical tuition. It mattered a lot to Seamus, and they've lost their main tutor.

The bigger issues around what Economics departments now can and should offer are, for me, under a Somebody Else's Problem field. But I don't envy my former colleagues their task: I think they're now at a staffing complement of 8.5, including two teaching fellows, where before the earthquakes we were 19.6.
Posted by Eric Crampton at 09:00:00 3 comments
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Tuesday, 21 July 2015

Hogan memorial

Seamus's funeral is scheduled for 2 PM on Friday, 24 July, at Harewood Crematorium, at the corner of Johns and Wilkinsons Roads, Christchurch.

His family are collecting memorial notes at the funeral home's website. If you'd commented here, please copy it there.
Posted by Eric Crampton at 11:12:00 0 comments
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Saturday, 18 July 2015

Seamus Hogan

Seamus Hogan died Friday of a brain aneurysm. He is survived by his wife Sarah, and their three children.

I met Seamus in 2003 when I joined the Economics Department at Canterbury. He was the best colleague anybody could ever hope to have: the kind that makes everybody else smarter and more productive. He set the Department's culture; he was Canterbury's Aaron Director.

Everybody knew that he was the one to go to if you had a problem in a theory paper that needed sorting out. Some folks get theory and have no intuition. Others have intuition but suck at maths (me). Seamus mastered both, and that's more rare than it should be. He was generous with his time, and pulled far more than his fair share of Departmental service - the master of the Departmental and university lore.

Seamus was this year elected President of the New Zealand Association of Economists.

Seamus taught just about every one of Canterbury's serious graduates in economics for well over a decade. He was the best lecturer I have ever seen perform. There was no finer preparation for being an economist, anywhere in New Zealand, than Seamus's microeconomic theory with a capstone of his graduate course in welfare economics. Our students knew it too. His course was not compulsory at Honours, but it was rare that less than 90% of the Honours cohort would sit it.

I see his, and our, students everywhere in Wellington.

If you've read him here, you know him. He'd just had his sixth anniversary as co-blogger.

There'll be more to come here in a few days. This is going to leave a pretty large hole in New Zealand's economics community. And a bigger one for his family.
Posted by Eric Crampton at 17:48:00 8 comments
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Tuesday, 10 July 2012

Worthless rugby players

If a rugby player leaves for Japan, is there a loss to the country? Seamus says no. So long as he's being paid his marginal product.
While rugby fans may decry his loss to the sport, Canterbury University economics lecturer Dr Seamus Hogan told NBR ONLINE there is no loss to the New Zealand economy.

"If he was prepared to play in New Zealand free, obviously that would be of tremendous value to the rugby union because it would get more bums on seats.

"Beyond that, there wouldn't be any spill over benefit economically to the country."

Dr Hogan says that in terms of economic activity, if Williams' presence in a match gets more fans into the stadium those people are just spending money they would have spent elsewhere.

"It is just a transfer. It's not a benefit to the country economically."

Dr Hogan says Williams gets almost the full value of his contract because he has unique talents.
If the Rugby Union is good at getting fans to pay for the value provided, and if Sonny Bill's manager is good at negotiating his pay, then he doesn't provide much value above his pay. Because the rugby union can't perfectly price discriminate, fans might get some surplus from a good player that isn't captured by the rugby union. But, if the player has a good manager, sponsorship and endorsement deals ought to mop up at least some of what's left.

But I would have expected that fans shifting away from rugby into something else because of the departure would have some loss of associated surplus. The other activity also generates surplus, just less of it; that's why it was the second choice prior to the staffing change.
He says somebody who is a very good lock, such as Brodie Retallick from the Chiefs, cannot command a high price because the next-best lock is right behind him.

"If he goes, the cost to the rugby union of losing him is not great because there is somebody waiting to take his place.

"But if Williams goes this year, we have to take a step down in the quality of our second five-eighths."

However, Dr Hogan says it would not be a big slide because there are plenty of other talented second five-eighths around.

Williams' biggest value is probably in terms of the entertainment he provides, such as taking his ripped shirt off during a World Cup match last year, he says.
 Afraid I'd missed that.
Posted by Eric Crampton at 07:00:00 3 comments
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Tuesday, 1 May 2012

Move over Duckworth Lewis

Dr. Scott Brooker's scoring method for rain-affected cricket games, and his graduation, made the weekend Press.
Self-confessed cricket nut Scott Brooker has created an adversary to the complex cricket-target formula used when rain disrupts play.
Brooker yesterday graduated from Canterbury University with his PhD on "An economic analysis of ability, strategy and fairness in one-day international cricket".
It marked the culmination of four years' work that began with "a phone call out of the blue" from the university's economics department asking him to investigate alternatives to the controversial Duckworth-Lewis method.

...
"What the Duckworth-Lewis method does is calculate what the target score should be based on the time that is left to play," Brooker said. "I show the Duckworth-Lewis method is better than the other systems used for international cricket before, but it is still not perfect and it can still be improved."

Brooker said his system used a different criterion of fairness to adjust the target score, based on the probability of winning before rain disrupted play.

"If you have a 60 per cent chance of winning when it rained, the readjusted target score should still be that you have a 60 per cent chance of winning the game," he said.
Scott wrote under Seamus Hogan. So I hope someday to be as confused by sports reporting on the Brooker-Hogan method as I am by the Duckworth-Lewis method.
Posted by Eric Crampton at 13:00:00 1 comments
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Tuesday, 31 May 2011

Bad economics, good politics

Seamus wonders whether politicians can signal sincerity by advocating policies that they know will be unpopular: the doctor who prescribes bad-tasting medicine may be more credible than the one whose remedies taste sweeter.

As with everything else, there's a literature on this. Long story short: politicians do better by pandering.

Let's run a Wittman line as a starting point. Specify two parties and two potential policies. Party A says policy 1 is best for the country; policy 1 is generally disliked by voters. Party B says policy 2 is best for the country; voters' priors tell them policy 2 is better. A bunch of economics wonks jump up and down about policy 1 being the better one; a bunch of talk show demagogues say economists can't predict anything. If voters are rational truth seekers who care about achieving the best outcomes, they'll discount the demagogues and vote for Party A. In that world, pandering can't be maintained, just as a used car dealer can't pass off a Trabant as a Porche.

Add the Caplan / Brennan twist that because voters really don't affect outcomes, they've little incentive to vote instrumentally; they vote to ally with groups with which they affiliate, to express their preferences about what the world could be like, to tell themselves and others what good people they are. Pandering can work in this world.

Now, look out into the real world. If Seamus were right that advocating sensible policies were best, or even were occasionally best, then we'd expect a whole lot better policy to emerge from the political process. Political markets are competitive; if voters wanted the effective but unpalatable medicine, they'd vote for it. Pointing to the NZ reforms of the 80s just says that voters will recant from Christian Science when the deathbed otherwise looms.

As for the lit, here's a couple worth checking:Unfortunately, politicians are largely constrained by what voters want, and what voters claim to want when at the ballot box is generally awful.
Posted by Eric Crampton at 07:00:00 0 comments
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Thursday, 4 March 2010

And Seamus returns

Seamus is back. Time for readers to start watching the by-lines again to avoid confusion. To help in confusion avoidance, I'll point again to my initial Crampton-Hogan disambigution page.
Posted by Eric Crampton at 16:03:00 0 comments
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Thursday, 9 July 2009

Welcome Hogan

I started blogging about four months ago now. So far it's been a solo act, and it's been a lot of fun. As my teaching semester rapidly approaches, it looks to be about time for me to take on a partner. And so, welcome Seamus Hogan. Seamus has the big office down the end of the hall here at the Canterbury Economics Department.

With apologies to Marginal Revolution, here is a simple guide for the potentially perplexed:
  • References to cricket/rugby/separating hyperplanes. Seamus.

  • References to Knight Rider/Rush/hyperdrives. Eric.

  • A simple question answered with an obscure and complex analogy from Shakespeare. Seamus.

  • A complex question answered with a quick simplistic regression from at-hand data. Eric.

  • Finally, contrary to the distinction between Alex and Tyler, I have every hope that you'll know exactly what both of our posts mean and that we'll both make you mad as hell.
If it helps in reading our posts, imagine mine being spoken very quickly in a generic Ameri-Canadian accent, while Seamus's are spoken more slowly, in a precise Kiwi accent, but with an extra R in the word "fravorite", every time.

Welcome Seamus! We don't know if it'll be a long stint or a short one as yet; we'll see how things go.
Posted by Eric Crampton at 15:24:00 1 comments
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