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

Smokefree 2025 - The Dismal Science

Jun 15, 2021

The Government’s proposed approach for achieving SmokeFree 2025 is a bit over-the-top. The proposals would restrict tobacco sales to a smaller number of to-be-licenced R18 outlets, which could then be subject to a sinking lid; impose an annual one-year increase in the purchase age for tobacco until full prohibition were achieved; restrict nicotine content in cigarettes to very low levels; prohibit filters in cigarettes; impose minimum cigarette pricing; and further restrict flavourings. In short, the only way to get a proper cigarette would be through the black market. The Ministry’s betting on folks shifting more heavily to vaping or heated tobacco. I’d expect instead that imposing all this stuff would have smokers flip to black-market excise-free cigarettes, and that smokers would be less likely to switch from those to vaping. I also wonder whether some smokers might try soaking loose … Read More

Border tech - The Dismal Science

May 13, 2021

Marc Daalder tallies a few of the failures in getting better tech rolled out at the border. On Sunday, National Party Covid-19 Response spokesperson Chris Bishop revealed that a voluntary rollout of saliva-based testing of border workers had seen just 339 saliva tests performed since it began in January. “Public health experts have recommended introducing regular saliva testing across our border workforce, but the Government has been very slow to act,” Bishop said. Now, the Ministry of Health has confirmed to Newsroom that a trial of another technology to detect Covid-19, the ëlarm app, has similarly foundered. Health officials dodged questions about how many border workers had signed up to the voluntary trial, but said it wasn’t enough to gain any useful data. “There has been a low initial take-up of the trial,” a ministry spokesperson said. Up to … Read More

Vaccine patents - The Dismal Science

May 12, 2021

This week’s Newsroom column covered some of the arguments around increasing vaccination rates in poor countries by voiding patents. It won’t work. A snippet: Fundamentally, voiding patents is an unserious way of dealing with a serious problem. The world needs substantial expansions in vaccine manufacturing capabilities as quickly as possible. Replicating the processes used by successful manufacturers is not simple, and constraints against expanding capacity need to be solved by investment. New Zealand’s contribution to the COVAX effort is laudable. But we remain pound-foolish. Spending a lot more on vaccines by contracting for greater capacity would help New Zealand become vaccinated more quickly, protecting us and providing some hope of normal international travel. Contracting for capacity would also mean that more vaccines could be produced more quickly for everyone else too, reducing the risk of new variants that could … Read More

Pandemic priorities - The Dismal Science

Apr 28, 2021

Prior to Covid, successive governments’ approaches to public health meant that we had central government ready and able to command District Health Boards to stop the sale of soda at hospital cafeterias, but unable to tell whether hospital staff were vaccinated during a measles outbreak caused by failure to make sure everyone was getting their measles shots. I worry that a new Public Health Agency will find itself tempted to shift back to those kinds of priorities once Covid is eventually in our rearview mirrors – and potentially even before then. This week’s column at Newsroom argues that the proposed Public Health Agency should be split into two parts, with one party focused on contagious disease. A snippet: The problem was not a fragmented DHB system. Rather the problem was that public health efforts from the Ministry of Health … Read More

The cost of a rolling omnishambles - The Dismal Science

Apr 15, 2021

The travel bubble with Australia has not brought room for others to come into the MIQ system from overseas. Instead, spaces are being decommissioned. Why? The system is leaky. The government cannot afford to let riskier people into those spaces, because the system can’t handle them. My column in Insights last week went through the problem. Maintaining quarantine-free travel with Australia is important. Expanding the bubble to include other Covid-free places like Taiwan and the Pacific Islands should be next. Both require keeping Covid out. Localised outbreaks would cause travel headaches, but broader outbreaks could break the bubble. New Zealand’s MIQ system has barely held together over the past year. Otago public health researchers tallied thirteen border failures since July, and at least six internal MIQ facility failures. Despite being a year into this, basic errors continue to be … Read More

Getting to Net Zero - The Dismal Science

Apr 12, 2021

We have not been fans of the Climate Change Commission’s draft report. New Zealand has an Emissions Trading Scheme with a binding cap, and a declining path for net emissions in the covered sector. Measures taken within the covered sector cannot reduce net emissions. NZU not purchased by one sector get purchased and used by another. Regulatory measures around coal boilers or electric cars can affect the price of NZU, and will affect which sectors move earlier or later in reducing emissions, but they cannot affect the quantum of emissions. Like, imagine you have a crate of 12 beers and 12 thirsty people, each of whom would be pretty happy to drink 2 or 3. They run an auction to decide who gets the scarce beers. The thirstiest folks drink two, others cut back to a half or none. The money … Read More

Important vaccination stats to keep in mind - The Dismal Science

Mar 13, 2021

Thomas Lumley runs the numbers on herd immunity and vaccination: Cutting transmission by 90% would need nearly everyone to be vaccinated. What if only 50% were vaccinated? Well, suppose someone with the virus would have passed it on to two people, but one of them is vaccinated. Instead of two new cases, we get one new case. Or, in a super-spreader event, suppose they would have passed it on to 10 people, but half of them of them are vaccinated. Instead of 10 cases, we get maybe four or five or six cases. If infected and vaccinated people were spread evenly throughout the country, 50% vaccination would reduce transmission by 50%x90%=45%. For every 100 cases before vaccination we would average only 55 cases after vaccination. Is that enough? Unfortunately not. Under the same approximation about even spread, the R … Read More

Vaccination priorities - The Dismal Science

Mar 10, 2021

Chris Hipkins announced some of the government’s prioritisation for the coming vaccination campaign.  I don’t quite get it, given the situation here differs considerably from the situation abroad. Here and abroad, there’s been priority on those at most risk. But who’s at most risk differs. Here, it’s people working in the border system, and the government has been entirely correct to prioritise those workers and their families. That absolutely makes sense. They’re also prioritising South Auckland, where we have had outbreaks because that’s where leakages from the border system turns up. But the rest of it is sounding way too much like prioritisation for MIQ. They’re looking at having a national significance category which will let them vaccinate anyone who the government wants to be able to travel abroad, like for representing NZ in sport. And then they’re having another … Read More

Border Costs - The Dismal Science

Mar 02, 2021

Cecile Meier walks us through some of the costs of a border system that has neither been able to safely scale up to meet need, nor able to find any reasonable way of prioritising entry into those scarce MIQ spaces. When Zane Gillbee hugged his family goodbye in South Africa before moving to Wellington, his daughter Lyla was still a baby and his son Callum a happy seven-year-old. Lyla is now a potty-trained, walking, talking two-and-a-half-year-old and Gillbee has missed it all. Callum, who is about to turn 9, has been diagnosed with separation anxiety and is on medication for it. Zane Gillbee is one of the hundreds of skilled migrants who moved to New Zealand for a better life before Covid-19 hit, expecting his family to follow. There are a lot of people in this situation, but not … Read More

Blessed are they that have not seen the model, and yet have believed - The Dismal Science

Mar 02, 2021

The Climate Change Commission’s recommendations span the breadth of the economy. They are required to come up with sector-by-sector climate budgets consistent with getting New Zealand with net zero emissions under the Zero Carbon Act. The sector-by-sector budgets rest on underlying models. The models build predictions about what will happen as ETS prices rise, and what will happen when some additional constraints are put into the system. Some of the CCC’s recommendations then mandate what they think are their best guesses about what a carbon price would do, subject to those constraints. The scope is vast. The entire economy, really. And the Government has already signaled that it will just do whatever the Commission says to do. So getting things right seems to matter and is rather high stakes. In that kind of situation, you’d think that the underlying models … Read More