Sure!

We've known about the problems of publication bias at least since 1992. If it's easier to get statistically significant results published than insignificant results, then there are whole literatures that become untrustworthy. 

Andrea Menclova at Canterbury is doing something about it. This has been a while in the making - we were talking about it when I was still at Canterbury. Good things take time, and now it's live.

Suppose your paper has been rejected from an EconLit-indexed journal, with the only important issues raised by the referees being that the results are unsurprising or insignificant.

Submit your paper along with the referee reports and the letter from the rejecting journal, and it will be considered at SURE Journal: Series of Unsurprising Results in Economics

Aim and Scope

The Series of Unsurprising Results in Economics (SURE) is an e-journal of high-quality research with “unsurprising” findings.

We publish scientifically important and carefully-executed studies with statistically insignificant or otherwise unsurprising results. Studies from all fields of Economics will be considered. SURE is an open-access journal and there are no submission charges.
SURE benefits readers by:

• Mitigating the publication bias and thus complementing other journals in an effort to provide a complete account of the state of affairs;

• Serving as a repository of potential (and tentative) “dead ends” in Economics research.

SURE benefits writers by:

• Providing an outlet for interesting, high-quality, but “risky” (in terms of uncertain results) research projects;

• Decreasing incentives to data-mine, change theories and hypotheses ex post or exclusively focus on provocative topics.

I love this project. I hope it attracts a lot of great work that would otherwise be accumulating dust in file drawers.

GST at the border - hitting the big guys

The government looks to be requiring larger retailers shipping goods to New Zealand to apply GST without a de minimis threshold. 

The Government will release a discussion document on Tuesday proposing to make foreign firms levy GST on items valued at less than $400 that they ship to customers in New Zealand from October next year.

The proposal would change the current regime under which most consumer items valued at less than $400 can be bought from overseas tax free. A lower threshold has applied to goods that still attract import duty such as clothes and shoes.

Import duty and biosecurity fees on low value goods will be axed, softening the blow for consumers. Foreign firms that sell less than $60,000 of goods to New Zealanders each year would be excluded from the obligation to levy GST.

In a first-best world, GST would apply regardless of whether goods were sourced domestically or from abroad. But transactions costs will wind up mattering.

I've had two worries around GST at the border.

The first is that collection costs can easily outweigh the amount collected on low-value items - and the particularly worrying collection costs are those faced by consumers. Unless foreign vendors find it worth collecting tax for the New Zealand government in order to have access to the New Zealand market, the hassles facing consumers at the border if they had to run the same drill as they have to run currently for goods over $400 would be a massive non-tariff barrier.

Where GST would be collected by Amazon and remitted to the government, that worry's gone. Amazon will face some costs in submitting GST returns to the NZ government, but that's not particularly different to the costs facing any other NZ retailer - and Amazon's scale is big enough that it's worth it to front the fixed cost of learning how to do that. Not applying import duty or biosecurity fees on low-value goods also avoids imposing that border-barrier. That does mean that there continues to be some cross-subsidisation of biosecurity services from higher-value to lower-value imports, but that's the same under either regime. I'd expect there would have to be some additional cost to Customs in somehow tracking which foreign-based retailers are nosing up on their $60,000 threshold, but it isn't nearly as bad as it would have been if Customs were having to run GST on each package coming through.

The second worry I've had is that requiring foreign retailers to submit GST to the New Zealand government might dissuade smaller ones from dealing with New Zealand at all. Firms hovering near the $60,000 threshold might decide it's not worth the hassle of learning how to deal with New Zealand rather than risk going over the threshold. Firms doing multimillions of business in NZ will comply; smaller internet vendors might not unless they're shipping through an aggregator like Amazon that might handle the tax issues for them.

That worry is still live - but it's an empirical question.

It'll be interesting to see the paper that's released later today. So far it sounds rather pragmatic, but it'll be hard to tell without reading the full paper. The pragmatic version would just get the larger outfits that ship to NZ to comply, keep half an eye out for firms whose shipments become large enough to worry about, and not worry about fringe imports.

I'd have wanted a much higher threshold than $60,000 in shipments, and I worry that could deter some small players - if those firms are making, say, 5% profit on each shipment, then once you're earning $3k per year in profits from shipping to New Zealand, you must learn how to keep track of all your NZ shipments for sending tax to the NZ government. Would the accounting fees for that be less than $3k, if you're based outside NZ?

Overall, it's far less bad than it could have been. No holding goods up at customs pending payment, no separate rigamarole for customers, and no extra customs handling fees. I'd consequently expect only small effects on the proportion of goods purchased online from abroad.

Not so imaginary hypotheticals - foreign buyer edition

I'd constructed a few scenarios of folks that might be hit by Labour's ban on foreign home buyers in my piece over at The Spinoff. 

First up, the bill is hardly restricted to ‘overseas’ people. If you live in New Zealand on a work visa, you’re covered. If you live in New Zealand as a permanent resident, but split your time between here and overseas, you might be covered depending on how many days you spend here.

That will not just hit fat-cats you might want to punish just for the sake of it.

A doctor moving to Greymouth from London on a work visa to set up a general practice would not be able to buy a house. And if she had planned on setting up practice in a house on residential land, that’s tough too.

Their Facebook mob didn't find the scenario all that believable. 

Hoisted from the comments at Offsetting, where I summarised the whole mess, comment from someone whose IP address in Disqus resolves to Canada.

Excellent post. I am actually a Canadian doctor looking at moving to NZ, having worked there before as a physician on a locum contract. I have been in contact with Southland DHB about work in Invercargill and also with Taranaki DHB about work in Hawera. Unfortunately, it seems I won't be able to buy a house in either place if the bill goes through as written, nor could I buy land and then build on it (without being forced to then sell within a year). Neither of these places has a housing or land shortage, as far as I can tell. In a way, maybe the gov't is doing me a favour by keeping me from getting burnt by the Kiwi property bubble, which has to pop one of these days, just like the bubbles here in Canada. Still, the overall effect is that I may just stay away.

One of the great things about moving to New Zealand, in 2003, was that it really didn't seem to matter here that you were a migrant. In America, it was rubbed in your nose constantly. Every interaction with the state was misery if you were not a citizen (I had an F-1 visa, then a Green Card). In New Zealand, that didn't happen.

And that just isn't true anymore. It has me contemplating citizenship for the worst possible reason - as protection against what Labour is currently doing and might yet do to people who aren't citizens.

Electoral lists - a simple recommendation

The Electoral Commission is worried that its published electoral lists - the list of each voter and that voter's address - could be misused. From Bryce Edwards' summary:

Currently there is almost a “free for all” in the use of printed electoral roll data. All sorts of companies, such as debt collectors and marketers make use of the printed electoral roll in order to carry out their commercial activities. There are huge privacy issues involved, which the law appears to be ignorant of, and there are people who therefore choose not to enroll to vote precisely because they don’t want their residential addresses to be made public.

There are also increasing concerns about analytical manipulation of personal data, and cyber incursions, which is made more possible by advances in technology. So, if the electoral roll data gets into the wrong hands, there could be significant personal privacy breaches. And, of course, such misuse of electoral data could undermine confidence in the Commission and the electoral process.

The risk is made worse by the fact that the political parties are provided with the electoral roll in electronic form. This is a provision designed by the politicians so that their parties can more effectively send election advertising to voters and so forth. It’s questionable whether the parties should be given this data, and it seems that it’s an accident waiting to happen, as there are no procedures or guarantees that any of the 16 registered political parties will prevent this personal data falling into the wrong hands. The Commission certainly raises questions about whether recipients really use the data safely and appropriately.

I have a very simple suggestion. If the Commission is particularly worried about the electronic roll, why not put a couple different dummy names into the lists supplied to each party? Those dummy names could share an address with, say, the head of the Elections Commission. Or a cousin. If the fake names start getting mail in ways that suggest improper use of the electronic list, then the Commission could do whatever it does about that kind of thing.

Sure, parties could guard against that by running the printed electoral list against the electronic one, but doing that would basically would require recreating the electronic list - unless there is stuff on the electronic list that isn't on the print version.

Even suggesting that they have done it might be enough.

Banning 'foreign' buyers

David Parker tries to defend his government's ban on foreign buyers:

The Government has hit back at International Monetary Fund claims that New Zealand's foreign buyer ban is "discriminatory", saying Kiwi homes should not be traded on the global market.

IMF officials, in New Zealand this week, called the Overseas Investment Amendment Bill "discriminatory" and hinted that banning foreign investment in housing was an over-reaction to a problem that might not even exist.

"Foreign buyers seem to have played a minor role in New Zealand's residential real estate market recently," IMF division chief for Asia and Pacific Thomas Helbling said on Tuesday. He added that there were other ways for the Government to respond if large volumes of unwanted foreign money suddenly flowed into New Zealand's property market.

Associate Finance Minister David Parker said the Government disagreed with the IMF.

"It's a matter of values," he said yesterday. "We believe New Zealand homes should not be traded on an international market."

Except his government's bill does more than that. It hits a lot of people who live in New Zealand - not just 'overseas' speculators. And it makes it hard for developers to build new housing. If the developer is considered an overseas entity because it has more than 25% foreign shareholding - which happens easily if you're publicly listed - then there's more hurdles in front of your next project. If your planned apartment tower is going to be partially financed by off-the-plans sales to foreigners who'd rent the apartment out to Kiwis, and if there aren't locals who'll pay the same price off-the-plan, then you're going to have a harder time financing that apartment building.

And there are a whole host of other problems too. Very few of the problems were caught in Treasury's Regulatory Impact Assessment, or more likely Treasury knew about it and chose not to say anything to avoid picking a fight with the Minister about the very obvious adverse consequences in the bill.

I covered some of those off in a couple of pieces at The Spinoff last week. The first one went through how we wound up with a dumb ban on foreign buyers, and the second one went through a lot of the problems with the legislation as written. And I summarized in this past week's Insights newsletter.

And it is darned depressing if Treasury pulled its punches in laying out the likely consequences of the bill in the Regulatory Impact Assessment for fear of getting offsides with the Minister.

There is very little evidence that New Zealand homes are really traded on an international market. Banning people who live here from buying houses and banning people who would help get more housing built from doing so seem very bad ways of addressing the housing shortage. The former does nothing to alleviate any shortage because people who live here still would have demand for housing - they'd just shift from owning to renting. The latter makes it harder to get new stuff built.

The only real way that foreign speculators contribute to a shortage of housing is if they buy a place and leave it empty. The housing shortage is the difference between the number of dwellings being built and the growth in demand for dwellings that accumulates over time. Empty houses can contribute to the problem. But there's no evidence that there's a growing problem in houses being held vacant, and no evidence that any vacant dwellings are disproportionately foreign-owned. And if there were a problem with vacant housing, you find a way of dealing with vacant housing rather than banning foreign buyers. Or, even better, just ease up the rules and make it easier to build so it doesn't matter if somebody keeps a house vacant for a bit.

Twitter and Facebook comments on my Spinoff pieces lead me to believe that a lot of Kiwis think they'd be banned from buying houses abroad, or would face big hurdles in doing so - and especially in places where there are housing shortages.

Let's take a spin. Please tell me if I have any of these wrong.

Here's Experts for Expats on the rules on buying property in the UK - London included. London is crazy expensive. What are the rules? You might have trouble getting a mortgage if you're based abroad, but that's about it. A Kiwi can buy a house in London. A Brit won't be able to buy a house in Dunedin.

San Francisco. That's the classic crazy one, right? Huge housing shortages. Could a Kiwi buy a house there without living there - and even maybe leave it vacant? Yes. Or I can't find any evidence there being any rules against it. Here's one real estate adviser website on it. Expect a few hassles around anti-money laundering stuff, but that's it. It'll just be proof-of-identity stuff. And that's the same for the whole rest of the US. A Kiwi can buy a house anywhere in the USA, regardless of whether there's a housing shortage in that city. An American won't be able to buy a house in Kapiti.

The only place in Canada that has any kind of restrictions thus far is a tax on foreign home buyers in Vancouver. You can go and buy a house or apartment in Montreal or Winnipeg the same way that I could - by paying the owner of it. But a Canadian wouldn't be able to buy a house in Nelson.

Heck, it will be easier for a Kiwi to go and buy a chateau in France than it would be for someone in Paris to buy a house Haast. And selling a house in Auckland could pretty easily let you afford a French chateau too.

This isn't just making things even with other places that put restrictions on Kiwis. Other places don't do that. Or at least not other reasonable places like the US, the UK and Canada. The Labour government is putting more restrictions on a foreigner buying a house in New Zealand than even Trump has put in on foreigners buying a house in America.

Labour seems to get a bit tetchy about being compared to Trump. On this one, they have out-xenophobed Trump by miles. The parts of the left that used to get mad about xenophobia have gone kinda quiet because their team's in office. If you think this bill is targeted at 'foreign speculators', you're deluded. The bill isn't written that way. It blocks people who live here from buying property. And since it does nothing to increase the number of houses available, and arguably reduces construction, it sure isn't a housing proposal. It's an anti-immigrant proposal.

And if your answer is "Why should foreigners be allowed to buy houses in the first place?", your whole morality is backwards. The presumption should be that voluntary transactions among consenting adults should be allowed, not the other way round. Banning people from doing things requires evidence of real harms to others. And nobody has provided any on the foreign buyer ban.

Precious arable land

I just don't get the fixation with making sure that nobody builds a house on agricultural land.

The government plans to make it harder for councils to approve new homes and lifestyle blocks on productive land near urban areas.

A report out today, called Our Land 2018, shows New Zealand's urban sprawl is eating up some of the country's most versatile land.

It highlights that between 1990 and 2008, 29 percent of new urban areas were built on some of the country's most versatile land.

Lifestyle blocks were also having an impact - in 2013 those blocks covered 10 percent of New Zealand's best land.

Environment Minister David Parker said one area that was at particular risk was Pukekohe, known as Auckland's food basket.

"We obviously need more housing around Auckland, but we also need to protect our elite soils.

"So we are proposing a National Policy Statement under the Resource Management Act which will require the councils when they are planning where to allow subdivisions or even rural lifestyle properties, they'll have to make sure that they don't encroach upon our most precious soils."

Mr Parker said the horticultural sector had been saying for some time that too much of its best land was being lost to housing and lifestyle blocks, and it was time to take some action.

Where to start.

First up, it's probably worth agreeing with one bit that the anti-sprawl people have right. Zoning in Auckland is stupid. It is stupid that people who live on major transport and passenger rail corridors can't turn their houses into apartment buildings to accommodate a lot more people. All of the restrictions against building up encourage building out instead - to the extent that that is allowed. And if infrastructure charging is wrong, that problem will be compounded.

But the solution to that problem isn't banning people from building out. The solution to that problem is a massive upzoning everywhere in town combined with congestion charging and better user-pays forms of infrastructure delivery like special purpose tax vehicles to pay off the bonds levied to put in infrastructure kit needed for urban expansion.

And it's very much worth fixing all that.

But suppose you have an agricultural paddock near town. The land can produce horticultural crops worth, say, $1m per year net after costs. The present discounted value of that stream of profits gets capitalised into the price of the land. And so the price of the land will already reflect peoples' expectations about the value of the agricultural produce that will come out of that land over the long-term.

If a developer is able to pay the farmer more than that, that tells us something important. It tells us that the value of that land in housing is higher than the value of that land in agricultural use. The value of all the agricultural output is already accounted for in the price of the land.

So you really don't need to protect valuable agricultural land from developers. The price of agricultural land already does that. If for some other policy reason government has decided to artificially subsidise building on that land as compared to other places, the solution to that isn't banning the development, it's getting rid of the subsidy. Shift the infrastructure to a user-pays basis.

Banning development on that land only makes sense if you really really believe that the person putting in the ban knows better than either the owner of the land or the purchaser of the land the future price path of agricultural products or dwellings. And in that case the person putting in the ban should just be buying the land directly and reaping the huge and obvious profits from knowing better than the market about futures prices.

We got into this stupid housing mess because the "Let's protect Precious Agricultural Land" people teamed up with the "Let's protect Precious Neighborhood Amenity" people and banned anybody building anything anywhere.

I get depressed when a government that came in promising to fix the housing crisis screws this stuff up.

Update: To address the likely first objection before it shows up: you don't have to worry about the "what if everybody did that" scenario. If land were being bid out of agricultural production and into use in housing, then the expected future price path of food would be a bit higher than otherwise - and the price of the next bits of agricultural land will be bid up. We do have access to imports too. And to address the second likely objection - if you're going to complain about the cost of food rising as consequence while ignoring that the cost of housing would drop, and ignoring that food can be imported while housing can't - there's something wrong with you.

Choice of baseline matters

Looks like folks are back to arguing about whether there's a J-curve in alcohol consumption. The J-curve plots out the relationship between all-cause mortality and drinking. Non-drinkers are at the left-hand upwards tip of the J, light-to-moderate drinkers are in the dip, then heavy drinkers are in the upwards tilt at the right hand side.

And the ballpark numbers I keep in my head on this are from Di Castelnuovo and Donati's metastudy from 2006 that has light drinkers (about a drink a day) with a relative risk of about 0.84 as compared to non-drinkers when former drinkers are excluded.

The Lancet has a piece up that the press are covering as showing no J-curve.

But they start their curve with a reference category of light drinkers: people consuming a small amount of alcohol per week. The J-curve normally starts with non-drinkers as a reference category. If you pull the non-drinkers out of any J-curve, then you'll have a hockey-stick instead: no downward tilt followed by a sharp upwards lift.

And, as Chris Snowdon points out, they do have the standard form buried over in an appendix. Page 31 of the appendix. I've copied that figure below. The one on the right is the all-cause mortality one. Once you put non-drinkers back in, you have a J-curve again. If you also have ex-drinkers, you have a sharper J-curve. The ex-drinkers are the even higher risk folks at the far left.

The reference category are people consuming from 0 to 5 standard drinks per week - so a bit under a drink a day. The category that always has the lowest all-source mortality because they're drinking a bit less than a standard drink per day. And the risk from drinking about 4 standard drinks per day (300 grams per week) is the same as the risk among never-drinkers - with much higher risk beyond that.

The same as we've known since Donati 2006.

Am I missing something? The newspapers are yelling about how the study means there's no J-curve.