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

Reducing the alcohol purchase age and risky driving - The Dismal Science

Mar 07, 2017

Reducing the alcohol purchase age from 20 to 18 did not increase the number of road accidents. If anything, risky driving dropped for a while. Stefan Boes and Steve Stillman have updated their earlier work (noted here) on New Zealand’s alcohol purchase age to bring in some more recent accident data to allow for longer term trends. It’s now up as an IZA working paper. They make an important methodological point – one that applies to a lot of work on minimum legal drinking ages. It is really easy to set up a regression discontinuity design using the birthday as the point of the discontinuity. The 17 year old, before the birthday, is the same person a week later, except with access to alcohol. Sure. But the RDD method can’t tell you whether you’ve identified a birthday effect … Read More

Govt requests NGO client data – Why do they need this? - The Dismal Science

Mar 04, 2017

I’m a big fan of letting NGOs benchmark their effectiveness using government data. But I don’t quite get why the government needs NGOs to collect some of this information on their behalf. Here goes. The government holds a huge amount of linked administrative data on all of us in the Integrated Data Infrastructure. All kinds of stuff can be linked up in the back end, under some pretty tight access controls. The government’s now demanding client information from NGOs who are the contracted service delivery arms for the Ministry of Social Development. The Privacy Commissioner is investigating the Government’s demand for client information in exchange for funds, after non-profit groups raised concerns. The Ministry of Social Development’s (MSD) new requirement for non-governmental organisations (NGOs) to supply identifying client information has blindsided non-profit groups. Every person accessing MSD-funded services must … Read More

Mexican soda and sweet storable substitutes - The Dismal Science

Mar 02, 2017

A couple more important points on the Mexican soda tax,  which I discussed in relation to a recent report on sugar taxes in New Zealand. First from the comments on Tuesday’s post: Mexicans also love to drink uncarbonated sugary drinks, like horchata, and drink more of those now carbonated beverages are more dear. Much of that market doesn’t go through regular retailers, being sold by street vendors and cafes, so I doubt they have any idea how much is being drunk. The Public Health people are also very naughty about their moving target. They say “sugary drinks”, but they can’t ever mean that, since they would have to tax a whole bunch of fruit juices. Sometimes they move to “soda” or carbonated, but I’m guessing that they won’t include any wines in that. What they want to tax is … Read More

Reading Creedy: Sugar tax report - The Dismal Science

Mar 01, 2017

John Creedy is really good at using complicated maths to make simple points. I’ll summarise the simple points in Creedy’s working paper on sugar taxes, issued earlier this month. Section 2.1 shows that, whenever people enjoy a bundle of goods of various healthiness, and whenever people are likely to shift from one good to another if prices change, any tax on a particular unhealthy good might reduce consumption of that good while increasing consumption of other less healthy goods. Consequently, you can’t just say that a soda tax would improve health – you need to show what the effects are across a broader set of consumption goods. At minimum the you’ll get less than you’d hoped for in terms of effects; it’s even possible to wind up getting worse health outcomes. Sections 2.2 and 2.3 work through the maths … Read More

Picking zones and picking winners - The Dismal Science

Feb 22, 2017

The push for more localist approaches to policy problems in New Zealand continues to gather steam. Earlier this month, the McGuinness Institute argued for what they’re calling Demarcation Zones for policy trials. Their formulation differs a bit from what we at the Initiative proposed in 2015, but the core idea is similar: let local communities take on additional devolved powers and see what policy variants seem to work better in which places. I go through some of the differences in last week’s print-edition NBR column. Here’s a snippet of the piece: Trialling policy at a local level can make a lot of sense. Not only does it let policy be more sensitive to local conditions, it also helps central government figure out what kinds of policies might work in a broader rollout. But it will always be tempting … Read More

Junk food taxes: more sweet silliness - Unsorted

Feb 16, 2017

A new paper suggests strong public health benefits from junk food taxes in Australia. Blogging has been light as I’ve too much on deck in the day-job currently, but since a few people have emailed me asking about this one, I might as well put here what I’ve told them. The effects found in the paper depend on how consumers respond to price increases. Those elasticities are drawn from a 2013 paper estimating elasticities in New Zealand using an Almost Ideal Demand System setup across a couple dozen food categories in household expenditure survey data. But responsiveness of spending to changes in average prices doesn’t tell us about consumption if people can shift to cheaper brands within the same category, as John Gibson’s Marsden-funded work shows. And I expect the problem will be worse due to the … Read More

UK’s migrant loss NZ’s gain? A Brexitunity - The Dismal Science

Jan 29, 2017

If the UK is set to kick out a pile of highly skilled academics working there on EU passports, maybe New Zealand should look to the Brexitunity.  I don’t know how many of them would move to New Zealand, and I don’t know which Departments have holes that need filling. But I’d expect that invitations to apply coming from New Zealand university departments, accompanied by a friendly welcome letter from Immigration New Zealand about our Skilled Migrant Visa system and how they’d all qualify, could be welcomed. It at least seems worth a shot. Here’s the LSE’s blog on the situation over there. I arrived at a meeting a couple of weeks ago and noticed one of my academic colleagues was visibly distressed. When I asked what was wrong, they said they’d just had a very alarming letter from … Read More

Citizen Thiel and ‘seasteading’ - The Dismal Science

Jan 27, 2017

A new year brings a new New Zealand media and Twitter zeitgeist, thanks to the revelation that US tech entrepreneur Peter Thiel is a New Zealand citizen. Tired: Low-skilled immigrants from China and the Pacific are ruining our economy. They’re hurting New Zealand’s productivity stats, they’re making New Zealand a low-wage economy, and they’re stealing all the houses. We need to focus on getting higher skilled migrants, and especially ones from places with not-scary last names that sound more familiar. We wouldn’t need to think about maybe having some terraced housing close to downtown in a city of a million people if the low-skilled migrants went away. Wired: Rich, highly skilled and highly connected American tech immigrant investors who buy properties none of us could afford anyway are totally the problem. Why would anybody give citizenship to a rich entrepreneur … Read More

I smell burnt toast! Acrylamide and cancer - The Dismal Science

Jan 25, 2017

One way to help shore up public support for Brexit when there’s been a bit of post-referendum second-thoughts: vigilant enforcement of the stupidest possible Eurocrat regulations. Remind Britons why they want to leave. And the Eurocrats have come up with a doozey. Chris Snowdon points to the coming EU campaign against baked potatoes. Pubs and restaurants could soon be fined for serving well-done items such as triple-cooked chips or thin and crispy pizza under a second phase of the Government’s crackdown on burnt food. Following the launch of a major public awareness campaign yesterday to help people reduce “cancer-causing” acrylamide in food, the Daily Telegraph can reveal that food safety watchdogs are planning to extend the warning to every food-serving business in Britain. Under a new European Union food hygiene directive, due to be adopted in the UK … Read More

Not so flush? You may still be in the global 1% - The Dismal Science

Jan 16, 2017

The Oxfam report on global inequality continues to make news in New Zealand. A few tidbits from the Credit Suisse report on which Oxfam’s figures are based: If you have net assets of $2,200 USD ($3,098 NZD), you’re in the world’s top half. If you have net assets of $71,560 USD ($100,760 NZD), you’re in the world’s Top 10%. You fat-cats! There are about two million Kiwis in this category. If you have net assets of $744,400 USD ($1.05m NZD), you’re in the world’s Top 1%. Auckland’s average house price cracked the million mark last September. So if you own the average house in Auckland, debt-free, that likely puts you into the world’s Top 1%. About 272,000 Kiwis are in the world’s Top 1%. It’s also fun to think about how New Zealand’s Superannuation system affects these … Read More