Afternoon roundup

The afternoon's worthies, as I close the tabs from one of the many open browsers....

• Joel MacManus tracks down the management-book origins of Prime Minister Luxon's favourite terms, from 'chunk it down' and 'big rocks' to 'gates of implementation' - which seems original to the PM. 
• Portuguese rules create black markets in port. Now I'm wondering whether NZ accession to the crazy European naming rules mean our port producers will have to come up with a new name for it.
• Rules that make it hard for landlords to remove problem tenants lead them to discriminate against potential tenants perceived as being more likely to cause problems. Latest iteration: COVID-19 eviction moratorium rules in the US. NBER working paper; Reason piece by Ilya Somin. 
• There've been a lot of stories around on loss of trust in media. Uri Berliner's from NPR is simply superb. I'd say it's must-read. Henry Cooke also good on the NZ angle. 
• The InfraComm report on council debt limits is very good. Just finished recording a podcast with author Graham Campbell on it, along with Peter Nunns and our shop's Nick Clarke; should be up on the Initiative's website in due course. I should have remembered to congratulate them for their advice on Auckland light rail. 
• $250 USD up front, never have cavities again. Checking into options to get it muled into New Zealand...
• I always used to tell my Econ 224 studies to be sceptical about assessments that rely heavily on existence value and option value. NZIER's case for rebuilding the Christchurch Cathedral hinges on existence value and option value of $8.9-$30.6 million per year, and an assumption that tourists will stay longer in New Zealand specifically to see the Christchurch Cathedral, and will spend up to $20.8 million per year during that extended stay. I'm .... sceptical. I used to present the students with a case for a 50-meter gold statue of me in Cathedral Square...
• Firms investing in R&D see employee departures to found start-ups when the new opportunity discovered as part of the research is too far from the company's main line. 

Deterrent?

As tobacco excise rises, so too do incentives to grow illicit tobacco for excise-free sale.

I'm a bit surprised that the fine for rather serious excise evasion was this low:

A 60-year-old Motueka man has been convicted and fined $6000 for illegally growing tobacco leaf.

Lawrence Reginald Jury apppeared in the Auckland District Court on Monday charged with being a party to the unlawful manufacturing of tobacco.

In 2010, Customs officers searched Jury's address and found 4,790 kilograms of tobacco leaf.

Customs says that would represent almost $2 million in revenue if the tobacco leaf had been manufactured at the time.

Spokesperson Shane Panettiere says Jury was providing flue-cured leaf to a person who he knew was unlawfully manufacturing tobacco.

Ross Ferguson, 64, of Wellsford was convicted and fined $1500 for unlawfully manufacturing tobacco with Jury.

This level of penalty can be efficient if there are large nonpecuniary costs associated with any conviction and if the probability of being caught conditional on growing illicit tobacco is very high. I don't know how obvious illicit tobacco production is, nor do I know whether it's more expensive to hide than illicit marijuana production should enforcement ramp up with excise increases. But I am a bit surprised that Radio NZ gave this one the headline "Illegal tobacco crop ends in hefty fine". I'd have expected fines more proportionate to excise avoided - perhaps even multiples of the avoided excise if the probability of detection isn't that high. But maybe there were extenuating circumstances about which I'm unaware; there's suggestion that the growers intended the grown tobacco for other uses. @MarkHubbard reminds me that IRD will likely be pursuing separate action; I'll be interested to see what the final penalties are.

I still think it would be fun to try to benchmark the elasticity of illicit tobacco supply by comparing sales of loose tobacco with sales of filters or tobacco papers as excise changes, correcting for time trends in reported marijuana use. Alas, I don't think there's available data on consumer purchases of 'roll your own' supplies.