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

Alcohol restrictions: Availability theory and inventories - The Dismal Science

Nov 06, 2016

It never made sense to me that restricting bottle shop hours would have any particular effect on alcohol consumption. It’s an empirical question obviously, but surely people hold inventories against periods of lack of supply. The only time I was caught out was when I didn’t know that Virginia ended bottle sales at 10pm when I was a grad student and we ran out of beer. It didn’t happen a second time. Otherwise, who could be affected by the closing times? Suppose that you’re trying to restrict your own consumption by keeping lower stocks in the house. At any point you could be tempted to go out and buy a lot more than some other version of you would like you to consume. The store being closed at particularly tempting times could have an effect. Like, if the 3am … Read More

Disaster recovery is local - The Dismal Science

Nov 04, 2016

There are a lot of lessons from Hurricane Matthew that New Zealand might have found useful in the aftermath of the Canterbury earthquakes.  Vero de Rugy has a great summary of Virgil Storr’s work for the Mercatus Centre on hurricane recovery in New Orleans. Take a recent investigation by PBS’ “Frontline” and NPR into flood insurance and aid distribution in the aftermath of Superstorm Sandy. They found that disaster victims’ flood insurance claims were systematically underpaid, while the insurance companies selected by the feds to handle these claims were busy finding ways to increase their profits and limit payouts. Meanwhile, aid programs were slow to distribute funds while punishing homeowners with mountains of red tape and unqualified contractors, which ultimately prevented them from returning to their homes and communities. Brad Gair, a disaster recovery manager in New York, … Read More

Is Big Data threatening bureaucracies? - The Dismal Science

Oct 20, 2016

AUT’s Rhema Vaithianathan sees the potential for big data in the public service. The age of Big Data has come to consumers rapidly, reinventing how we shop, socialise, bank and get from A to B. And a Big Data revolution is slowly rolling through the public sector too. If we do this right, in 20 years or so the government ministries that currently employ thousands, and sprawl across central Wellington should each fit into a small Thorndon villa. The vast bureaucracies of Wellington serve two main purposes. First, they monitor. For example, ensuring that schools are open the requisite days, that police are on the beat and other taxpayer-funded services are working as they are supposed to. Second, they collect information about these services useful for planning and policy advice. This helps the government to decide how best to … Read More

Dangerous cheeses - The Dismal Science

Oct 16, 2016

The NZ government continues its crusade against an elderly woman whose four cows produce the milk for her small-scale raw milk cheeses. My piece in this week’s Insights newsletter: Thomas Hobbes told us the State is necessary to protect us. The war of all against all that would ensue without a State to protect us from each other would be worse than even a terrible despot. New Zealand’s Hobbeseans can this week thank the State for protecting us from artisanal cheese. Biddy Fraser-Davies’ ongoing fight with the Ministry for Primary Industry again bubbled up into the media spotlight. She makes award-winning small-batch raw-milk cheeses in Eketahuna. Radio New Zealand reports that, last year, at least half of the $40,000 her four cows’ cheese earned went to cover the State’s regulatory fees. She says, “It works out that the … Read More

Education – private and public benefits - The Dismal Science

Oct 11, 2016

Massey University’s Professor Giselle Byrnes, Assistant Vice-Chancellor (Research, Academic and Enterprise), writes on the public benefits of tertiary education in this past week’s NBR. She makes a good case for the existence of public benefits; the main thrust of the piece is that the Productivity Commission’s report on tertiary pays insufficient heed to the public benefits while focusing on the private benefits and the appropriate share of those borne by students. Leaving aside for now that the Prod Comm report was rather broader reaching than that, the casual reader of Professor Byrnes’s would likely be surprised to find out that the government is already covering about 82% of the cost of tertiary education, once you factor in the subsidy provided through the zero percent loans scheme. Mightn’t it make sense to point out the private benefits if … Read More

Compensating live organ donors - The Dismal Science

Sep 22, 2016

I’m really excited about this one. Last year, Chris Bishop’s Member’s Bill on compensation for live organ donors was drawn from the ballot. New Zealand provided some small amount of compensation to donors for their lost income, but under ACC rules that come with strict caps on how much can be paid – for reasons that make sense for ACC but not for live organ transplant. We submitted on the bill, based on our report showing that the government saves about $120,000 in costs for every kidney transplant. Our report, and our submission, are here. We recommended: strengthening the compensation regime from 80% of lost earnings to 100%, up to a cap in case, say, a bank CEO becomes a live donor; playing fairly to those not in employment by compensating them as though they were employed full time on the … Read More

The ever-reliable Alcohol Healthwatch on teen drinking - The Dismal Science

Sep 20, 2016

Whatever the survey, Alcohol Healthwatch is going to say it shows that the government needs to crack down on booze. From RNZ’s reporting on the latest survey: An alcohol watchdog hopes a survey that shows more than one in four teens aged between 15 and 17 often drink a risky amount of alcohol serves as a sharp wake-up call. About 27 percent of the teens questioned for the survey, carried out for the Health Promotion Agency, said they had at least eight drinks the last time they consumed more than two drinks of alcohol. More than 50 percent said they had had five or more drinks. Alcohol Healthwatch director Rebecca Williams said more needed to be done to reduce the availability and cost of liquor, and the marketing of alcohol. Ok, let’s turn then to the survey. It’s the … Read More

Sperm donation and incentives in New Zealand - The Dismal Science

Sep 16, 2016

Here’s the Adam Smith Institute on New Zealand’s sperm shortage: The world simply will not make sense if you do not grasp the first and most basic thing you must know about economics. Which is that incentives matter. What the incentive is, what the action or activity is, those are things which can all vary wildly. Whether something acts as an incentive or a disincentive can change too. But it really is crucial to understand that whatever else might be going on, incentives matter: In 2004 the New Zealand government introduced legislation banning anonymous sperm donations and preventing donors from receiving any payment for their services. Donors in New Zealand have minimal costs covered (such as travel to the clinic) but are not compensated for their time, which after rigorous medical testing and counselling, can be significant. Under … Read More

Alcohol, cancer, and exercise - The Dismal Science

Sep 12, 2016

While the links between alcohol and any particular disorder are irrelevant in the grand scheme of things where the net effects on mortality and morbidity are what really matter, the link with cancer has been getting a lot of airtime – and a lot of attention from the dedicated team at the University of Otago. And so this is then interesting. The relationship between alcohol and cancer seems to vary by exercise. While there’s a straight linear increase in cancer risk with alcohol consumption among those with little physical activity, those engaging in more than 15 hours per week of MET [some measure of exercise] showed a J-curve relationship – albeit one where the bottom part of the J wasn’t statistically different from zero.   The paper also finds the standard J-curve in all-cause mortality risk, … Read More

Pharmacy only access for e-cigarette nicotine - The Dismal Science

Sep 09, 2016

The folks over at the public health blog argue that access to nicotine for vaping should only be through pharmacies, or maybe through some licensed registered shops. One thing is obviously missing from their tallying of the relative costs and benefits of pharmacy-only access. I’ll copy their table below. A brief summary table Attribute/issue Pharmacies Vape stores Product array Likely to be more limited Likely to be more diverse and include the newest products Product expertise Less likely to have personal experience and specific product expertise More likely to have personal experience and specific product expertise Tobacco cessation expertise Staff likely to be trained in smoking cessation support Staff more likely to require formal cessation support training Experience with regulations Accustomed to dealing with regulation of restricted substances Less experience in dealing with regulation of restricted substances and of advertising restrictions Profit … Read More