Eric Crampton

Dr Eric Crampton joined the New Zealand Initiative as Head of Research in August, 2014. He served as Lecturer and Senior Lecturer in Economics at the Department of Economics & Finance at the University of Canterbury from November 2003 until July 2014. The Dismal Science syndicates some of his blog posts from Offsetting Behaviour. Eric is on Twitter @ericcrampton

JEEM - The Dismal Science

Jan 19, 2021

Getting to Browser Tab Zero so I can reboot the computer is awfully hard when the one open tab is a Table of Contents for the Journal of Environmental Economics and Management, and every issue has more stuff I want to read. A few highlights: Gugler et al demonstrating the effectiveness of British carbon pricing over German regulatory interventions in the electricity market. Carbon prices were far more effective in getting to a cleaner power grid. Steven Smith on prior appropriation versus proportional division in allocating water rights, leveraging a neat natural experiment (the formation of Colorado forcing a change in water rights). They suggest proportional rights (think: NZ’s way of divvying up fishing rights within a total allowable catch) can get you to higher yields and higher-valued crops; water markets can work around inefficient allocations in either … Read More

Vaccines are cheap - The Dismal Science

Jan 19, 2021

Israel chose to pay a bit over the odds for the Pfizer vaccine to get earlier access. Here’s The Times of Israel from 16 November. American government will be charged $39 for each two-shot dose, and the European bloc even less, but Jerusalem said to agree to pay $56. Israel has now vaccinated more than 80% of their elderly population and is getting the second doses into arms. I do not know what New Zealand is paying. But suppose we’re paying the same as the US. For only $85 million USD more, or just under $120m NZD more, we might have also had early access. $120m sounds like a lot in normal times. But if it meant that we could have everyone vaccinated from mid-year, instead of starting to roll-out vaccination from mid-year, we’d be able to open the … Read More

Aristocracy of Pull continues - The Dismal Science

Jan 18, 2021

RNZ reports on continued arbitrariness on decisions at the border.  British comedian Russell Howard is about to tour New Zealand and other acts allowed in through managed isolation this summer include drag queen RuPaul and musicians at Northern Bass in Mangawhai and the Bay Dreams festival. The vice-president of the Promoters Association, Gray Bartlett, said despite being an approved promoter with Immigration New Zealand, he was offered no explanation on why acts such as the Music of Cream and American speaker Michael Franzese were turned down. No-one had spelt out what the criteria were for approval nor who was making the decisions. “What I really don’t like is where governments begin to start with favouritism and choosing who they like, or getting people to choose who they like to come in. That’s not right. And and it can be … Read More

Cleansing the Twitters - The Dismal Science

Jan 13, 2021

I’m less than convinced by arguments that platforms like Twitter should be subject to common carrier regulation preventing them from being able to decide who to keep on as clients of their free services, and who they would not like to serve. It’s much easier to create competition for the network in this case than it was for Telecom in the 1950s. There has been some concern about the coordinated action by a lot of platforms against a set of conservative platform users in the US. It has been taken as suggesting some leftist conspiracy against right-wing views. There are, of course, multiple hypotheses consistent with the available data. Here are some of them, with some very thumb-suck probabilities. The terms of service always barred what Trump et al have been up to. But the platforms have been cowed by … Read More

For a carbon dividend - The Dismal Science

Dec 16, 2020

My Dom Post column this week makes the case for a carbon dividend. Canada imposes a carbon tax on provinces that haven’t established their own carbon pricing regime, and is set to substantially hike the tax to $170/tonne.  How is it politically feasible? Money collected in each province is sent back as a grant to residents in each province. Carbon prices maintain incentives at the margin to change behaviour; redistributing the revenues in a lump-sum manner preserves those incentives while addressing equity concerns and making the thing politically possible. Here, the Climate Commission and government are behaving as though higher explicit carbon prices are impossible. There is no defensible explanation for carbon measures that would cost over ten times as much per tonne abated. If you want to do the most good possible, you have to buy all the cheapest … Read More

RSE, MIQ, and WTF - The Dismal Science

Dec 16, 2020

Late last month, the government announced it would allow 2000 seasonal workers into New Zealand’s Managed Isolation and Quarantine system on Recognised Seasonal Employment (RSE) scheme, with workers to arrive from January to March 2021.  There’s just so much that’s backward in all of this. The RSE scheme is open to workers from the Federated States of Micronesia, Fiji, Kiribati, Nauru, Palau, Papua New Guinea, the Republic of the Marshall Islands, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu. The most recent World Health Organization COVID-19 situation report for the Western Pacific notes that the Federated States of Micronesia, Kiribati, Nauru, Palau, Samoa, Tonga and Tuvalu have not reported a case to date – as of 25 November. Since then, Samoa has had two positive cases caught at their border. Meanwhile, Papua New Guinea has large-scale community … Read More

Rationing scarce MIQ spaces - The Dismal Science

Nov 13, 2020

Imagine yourself in the place of the MBIE boffin tasked with deciding which application for a scarce MIQ space is most deserving or most needed. The job isn’t easy. The government keeps a small number of spaces in MIQ for getting critical workers in. But somebody has to decide which workers are most critical. Applicants fill in forms to make their case, but that won’t help a pile. Every applicant will have incentive to present the most sympathetic case possible, and whoever is assessing the cases has to figure out how much overstatement is present in any of them. Think only about agriculture for a moment. I can easily sympathise with the horticulture folks who are looking at just horrible losses because they can’t get workers in through MIQ to do the picking. There are lots of calls for them … Read More

Borders and Bubbles - The Dismal Science

Aug 11, 2020

There’s no Covid on the Cook Islands. But isolation-free travel into New Zealand from the Cooks looks to be a long way off.  The Prime Minister confirmed on Monday that Cabinet had considered draft text being worked on via officials which will become the basis of an agreement for quarantine-free travel between the Cook Islands and New Zealand. “That draft text is near conclusion,” Ardern told reporters. “The next phase will be the verification phase; that is where we have officials on both sides who undertake work on the ground to assure ourselves that we’re meeting the expectations on both sides.” Ardern said the Government’s expectation is that there will be travel between officials undertaking that verification work within about the next 10 days. She said the third phase will be the finalising of details. The Government will get advice … Read More

Education departments are weird - The Dismal Science

Aug 11, 2020

So our Joel Hernandez has completed some more work on what’s all going on in New Zealand’s school system and an Auckland Uni education prof is mad about it.  Oh well. Joel’s long term project has been to look at differences in outcomes across students and schools, using the administrative data held in the StatsNZ data lab to adjust for a rather broad assortment of things that students bring with them into the classroom. Naive league tables will credit, or damn, schools for outcomes that are largely due to differences in the communities that those schools serve. Getting better measures on outcomes, adjusting for the differences across families that we can see in the data lab, helps. Our measures don’t tell you what’s going on in any particular school, but they do let you know whether a … Read More

Safe arrivals - The Dismal Science

Jul 29, 2020

If entry into New Zealand from abroad is safe, it should be allowed.  People arriving from places that are Covid-free, or no more risky than New Zealand, and who get here on flights that do not intersect with risky places, should return to normal travel arrangements. Currently, the Cook Islands, the rest of New Zealand’s Pacific Island realm, and Taiwan would fit the bill – along possibly with Vietnam, if the epidemiologists figure that’s safe. Similarly, any Australian states that get things reliably under control and maintain adequate border measures against the states that haven’t, could be invited into our Pacific ‘bubble’. Entry from other places needs to be made safe. And New Zealand needs to scale up its managed isolation system so that more people can join us – both Kiwis abroad returning home and others who might wish … Read More