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

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

Five dollar prize - The Dismal Science

Oct 03, 2018

I’ve been absolutely loving Tyler Mahan Coe’s podcast series on the history of country music and the country music business. Every story is fascinating. A lot of the stories aren’t good for the kids. But I played the one about the Louvin Brothers (nee Loudermilk) for the kids. I paused it after this bit too see if they could figure out what was going on. Can you? Charlie Loudermilk and his big brother, Ira, hated every day of picking cotton except one. That was the day Colonel Loudermilk took the three oldest kids out to the field, right at sunup, and showed them all a $5 bill. He said whoever picked the most cotton that day would get to have the money. $5 might as well have been $500 to these kids; they hit the cotton rows at top … Read More

Carbon emissions and the Taranaki ban - The Dismal Science

Sep 28, 2018

MBIE’s advice on Labour’s ban on Taranaki oil and gas exploration suggested that global emissions could go up. Could that happen? It depends on what you think’s going on in the rest of the world. Suppose that the whole world were under a binding emissions cap under a global cap and trade regime. If New Zealand produced less natural gas and some stuff that used to be produced with natural gas here instead were produced using coal in China, global emissions would not go up. There’d be a slight decrease in emission permit purchases in New Zealand and a somewhat larger increase in emission permit purchases in China. The price of permits would go up, some lower-valued things that otherwise emitted carbon would stop happening (with those permits then sold back into the system) or some production processes elsewhere … Read More

Confidence in the Vice Chancellor - The Dismal Science

Sep 19, 2018

In a prior life, I was on Academic Board at the University of Canterbury as Economics Department representative. The meetings were usually tedious. Much of the point seemed to be to provide a forum for people to air their grievances so they could feel they were listened to, but without consequence. There’d usually be somebody who’d make a five-minute speech about how neoliberal managerialism was ruining everything, and then would be happy enough until making the same speech again a few months later. It all helped me realise that the point of meetings often is not to achieve any outcome at all, but to make people feel listened to. But it was also an important way of finding out what was all going on in the rest of the University and initiatives being pushed that we needed to pay attention … Read More

Not-so-sweet advice - The Dismal Science

Sep 14, 2018

Imagine that you were the Chief Science Adviser for a Ministry. You need to produce a short briefing note to the new government for some issue in your Ministry’s remit. Your Ministry had, just a couple weeks earlier, released a comprehensive report on the topic that your Ministry had commissioned from a top economics consultancy. Your Ministry had had the report since August, but had only just released it. What the hell must be going through your head if your briefing note to the Prime Minister via the office of the government’s Chief Science Adviser presents the opposite conclusion to the commissioned study and doesn’t even mention that the commissioned study exists?! So Peter Gluckman was on Radio New Zealand a while back. He talked about mounting evidence for sugar taxes. I’d heard him on the radio and wondered what … Read More

Vacancy rates - The Dismal Science

Sep 03, 2018

Sitting at my desk in Wellington, it’s easier for me to tell you the housing rental market vacancy rate for any city in Canada than it is for me to tell you the rental market vacancy rate anywhere in New Zealand, Wellington included. The Canada Mortgage and Housing Corporation (CMHC – a government outfit) has stats on the vacancy rate in every metropolitan region from 1992 through 2016. I don’t know if they’ve stopped producing the series – the last update was March 2017. In New Zealand, the best I’m aware of is disjointed stats from the different real estate companies about vacancy rates for the properties they handle. Why does it matter to know? In Canada’s stats, we can see that the 2016 vacancy rate in Saskatoon, Saskatchewan was 10.3% while it was less than 1% in every … Read More

Non-serious students, one serious problem - The Dismal Science

Aug 29, 2018

John Gerritsen at RNZ picks up last week’s NBER study on how the PISA rankings would change were students to take the test more seriously and rounds up some local reaction: Michael Johnston, senior lecturer in education at Victoria University, said the study’s assumption that New Zealand students were not trying hard enough if they left questions unanswered might not be correct. Dr Johnston said it might be a by-product of the NCEA assessment system. “In NCEA students can opt out of certain standards and certain aspects of assessment and still get credits for what they do, whereas in most other countries that’s not true,” he said. “So if our students are used to that way of thinking about assessment then perhaps that’s why they show up as being more likely to be what the researchers call non-serious.” … Read More

Low stakes PISA - The Dismal Science

Aug 24, 2018

New Zealand’s low PISA rank seems, in part, due to Kiwi students not taking the test very seriously. Akyol, Krishna and Wang develop a measure checking whether a student is taking the PISA test seriously (leaving questions blank while having time left, for example), and see whether it affects country rankings compared to simulations where children take the test seriously. [HT: Marginal Revolution]. New Zealand’s PISA rank is 17th for the year they’re checking. In a simulated world in which students in every country took PISA seriously, New Zealand’s ranking would rise to 13th. If New Zealand students stayed as they are but all other countries moved to take PISA seriously, we’d fall to 26th in the simulations. And if only New Zealand moved to have all students take PISA seriously, we’d rise to 10th. The change for … Read More

A simple landfill calculation - The Dismal Science

Aug 21, 2018

That this one comes up so often speaks poorly of our basic numeracy and sense of scale. There’s basically no chance that landfills expand to take up any substantial part of the country. This is the kind of back-of-the-envelope thing that everybody should be able to do in their head. Kate Valley services Christchurch. It has 1000 hectares total, only a tiny part (37 hectares) of which is actual landfill – the rest is forest buffer and the like. But let’s call it 1000 hectares. It has a 35 year life expectancy. The Christchurch area is about half a million people. Let’s keep all the numbers round to make life easier – we’re looking for order of magnitude stuff here really. If Kate Valley can handle 500,000 people’s trash in a 1000 hectares for 35 years, then it … Read More

Bag Ban: read the appendix - The Dismal Science

Aug 13, 2018

The Ministry for the Environment’s consultation document on banning plastic bags is out. The key table, or at least the most interesting table, is in the appendix. It shows, from a Danish study, the number of times a reusable shopping bag would have to be reused to have less environmental impact than current disposable bags. Source: Ministry for the Environment. 2018. Proposed mandatory phase out of single-use plastic shopping bags: Consultation document.  The consultation document provides no cost-benefit assessment, but Question 8 asks those making submissions to assess whether the benefits might outweigh the costs. I can only speak for our own household, but I doubt we’re that we’re that atypical. We have a few reusable bags at home. The ones we have get reused a lot, because we use them on planned trips to the store. But most … Read More