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

Illicit markets and Bali Booze - The Dismal Science

Nov 11, 2019

The Herald reprints an Australian story on a couple of tragic deaths in Bali from drinking cocktails that had methanol in them.  The story argues that methanol is likely the result of home distillation. But what the young tourists were experiencing was far from a hangover. They’d consumed a toxic cocktail laced with methanol hidden in their drink. Without taste or smell, the young travellers had no idea what they’d been served at the bar. Methanol, while closely related to ethanol (which is found in wine, beer and quality spirits) is far more toxic and can be found in drinks made from home-distilled spirits. Commercially made spirits are safe to consume because manufacturers use technologies specifically designed to ensure methanol is separated from the ethanol that goes into the bottles we purchase. Home brew systems, however, makes separation more difficult … Read More

Vaccination, compulsion, and paternalism for the lower orders - The Dismal Science

Nov 07, 2019

The National Party has come out in support of encouraging greater vaccination uptake. But it sure isn’t the way I’d do it. National’s suggested docking the benefits of those on benefit whose kids aren’t keeping up with their vaccinations. Some in National have suggested extending that to payments under Working for Families, but that appears more controversial. We can go back to first principles and note that there’s a reasonable case for government intervention to encourage vaccination – as I have done previously. There is compulsion all over the place in public health, except where there’s an actual market failure case for using compulsion. I think that case is strongest when it comes to those workers most likely to be in contact with not-yet-vaccinated youths, and with people whose immunity may otherwise be compromised. So, ECE workers and … Read More

Public health, externality, and vaccination - The Dismal Science

Oct 31, 2019

Paternalism is contentious. Arguments for state action to protect us from ourselves are fraught. I come down pretty heavily on the anti-paternalism side of the argument, but I’ve heard respectable defences of paternalism. But policy around vaccination is hardly paternalistic. There’s a clear market failure that could be pointed to in any sound Regulatory Impact Statement. In a place with relatively high vaccination rates, the primary benefit from your getting vaccinated goes to other people. The risk of catching anything is low, because everyone else is vaccinated. If you also get vaccinated, you very slightly reduce your already low risk of catching anything. You also very slightly consequently reduce the risk of anyone else catching anything – there’s still risk among those who are vaccinated, and there are others out there who cannot be vaccinated because they either are immunocompromised, … Read More

Google keeps making our lives better - The Dismal Science

Jun 19, 2019

Navigating post-earthquake Christchurch was tough. Every day brought a new set of road closures to route around. And they weren’t always easy to predict in advance. If enough roads were closed on the south side of town, I’d want to take the longer northern loop to get from New Brighton to the University – but I wouldn’t know that until I hit the closures. So I’d then asked some friends at Google whether this couldn’t be automated (and posted on the basic idea here). Traffic flow data already held could be used to infer road closures. If everyone who’d been recommended to follow Dyer’s Road down to Ferry Road took a turn on Linwood instead, and nobody was on that small stretch of Dyer’s Road, it would be a safe guess that it was closed. Why not flag it … Read More

Data termination - The Dismal Science

May 23, 2019

Awww, nutbunnies. In April, Paula Penfold and Eugene Bingham reported that 2500 women had had their requests for abortion turned down over the last decade. Me, and a few others, immediately started imagining some rather interesting research that could be done if those records could be linked up in the Integrated Data Infrastructure (IDI). So I started making enquiries. It’s not a study I’d ever do as part of the day-job, but if a few queries from me could help the academics who would actually do the studies and tell me interesting things about the world I didn’t know before – well, I was happy to poke around to see whether that data could be linked up in IDI. It can’t be. Or, at least, not easily. Consulting physicians provide to the government reporting on approvals and rejections, case-by-case, … Read More

Breaking the pharmacy cartel - The Dismal Science

Feb 15, 2019

I wish that government spent even half as much time looking at how its existing regulatory structures create cartels as it did in the rest of its antitrust enforcement. The Herald reports that a new entrant has finally started shaking things up in pharmacy, reducing costs to consumers. They get the framing entirely backwards, focusing on reduced earnings among the Chemist Warehouse’s nearby competitors. I wish they’d open an outlet in Wellington so I could have a look. Here’s a dumb small example of what things are like here. I occasionally have minor heartburn. In North America, I’d buy a big bottle of Tums antacid. It’d take me a year to go through the big bottle. Now they sell them there in even bigger bottles: 330 tablets for $13.44 – $0.04 per tablet. Add on exchange rates and GST … Read More

Good character? - The Dismal Science

Jan 14, 2019

National wishes to impose a ‘fit and proper persons’ test for those supplying legal medicinal cannabis. 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 … Read More

Bias toward action? - The Dismal Science

Nov 15, 2018

Kiwis so-inclined can petition their Parliament for legislative change. But they cannot petition Parliament to maintain the status quo. Victoria University’s Chris Eichbaum wants the government to ban private fireworks displays. This is just phenomenal. With this level of support we now have an opportunity to get them issues in front of law makers and to push for the necessary changes https://t.co/Ada1CsW6xv pic.twitter.com/5bpeJgoLym — Chris Eichbaum (@ChrisEichbaum) November 6, 2018 I kinda like fireworks, so I submitted a petition asking the government to maintain the current rules. I started from Chris’s petition, added the word ‘not’ in a couple spots, listed some of the ways that fireworks are awesome, and submitted it. A few days later, I got a very apologetic phone call from the Clerk’s Office saying that it’s only possible to petition … Read More

Have you considered using prices? - The Dismal Science

Nov 08, 2018

Talk about an elephant in the room. Radio New Zealand’s story on unregulated informal sperm donor networks is a great chronicle of what happens when you ban payments for sperm donors, without once mentioning that the whole thing is a consequence of a ban on payments for sperm donors. It’s like a murder mystery where all the facts are laid out, but nobody has figured out who the obvious killer is. It really is the butler! Why hasn’t anyone arrested the butler! What do we find in this story? Waits at official fertility clinics of 18 months to two years (blamed in part on increased demand from single women); High costs at fertility clinics: $300 for an initial consultation, donor’s testing costs of $1500… Men shunning clinics because donating at the clinic is costly to them: “The clinics, they … Read More

Doing less good than we could – carbon edition - The Dismal Science

Oct 09, 2018

New Zealand has an emissions trading scheme. It isn’t perfect. But for the sectors covered by the ETS, including transport, best policy for reducing carbon dioxide emissions is fairly simple: buy and retire credits.  The government simply cannot know whether the cheapest way of reducing CO2 emissions is by getting the least efficient cars off the road; having people switch to electric cars; planting trees; improving methane capture at landfill – or something else entirely. So stories like this are a bit depressing: As well as looking to revamp the Government’s car fleet, there are number of other options Shaw is considering. These include exploring the idea of increasing tail pipe emission standards – something the Productivity Commission recommended in a recent report. “We’re also examining the Productivity Commission’s proposal for a feebates scheme – which lowers the upfront … Read More