The Dismal Science

Earthquake anniversaries

Eric Crampton Feb 22, 2018

Seventh anniversary of the Christchurch earthquakes. GNS figures there’s about a 1/120 annual risk of something of similar size hitting Wellington: 0.833%. Recovery here will be much harder than in Christchurch. There are few local options for firms to relocate to while downtown is torn down and possibly rebuilt. There are few transit routes in and out. The airport could … Read More

Cannabis Cross-price Elasticities

Eric Crampton Feb 19, 2018

It’s been a bit of an open question whether legalised marijuana would lead to more or less alcohol use.  If the two goods are complements, say if people liked drinking while consuming cannabis, then any increase in cannabis use could yield greater alcohol use. If they were substitutes and people smoked instead of drinking, alcohol use could drop. RAND … Read More

Informative advertising

Eric Crampton Feb 09, 2018

New Zealand’s in a fun legal limbo right now on e-cigarettes. Everybody knows that the Ministry of Health is soon to be liberalising, so the de jure restrictions that prevent selling of nicotine-containing e-liquids aren’t being enforced. It’s pretty easy to get vaping liquid. In some ways, whatever regulatory regime comes out of this will be more restrictive than the … Read More

Bad Beer takes

Eric Crampton Feb 08, 2018

The Atlantic’s Derek Thompson likes craft beer. But his take on its rise in the US doesn’t make a lot of sense. And I’m surprised that Noah Smith didn’t catch the errors. Thompson argues that the complicated morass of American state-level regulations around brewing and beer distribution meant that the big brewers couldn’t take the whole field. At … Read More

Luigi Zingales on Oliver Hart, co-winner of the 2016 Nobel Prize for economics

Paul Walker Feb 05, 2018

At the 2018 ASSA meeting Luigi Zingales delivered a lecture honouring Oliver Hart, co-winner of the 2016 Nobel Prize for economics. In part Zingales said, In the 1970s, this question [the make-or-buy dLuigi Zingaleecision] started to receive attention in the so-called transaction-cost literature. The key contributions during that period were Alchian and Demsetz (1972), Williamson (1971 and … Read More

Sugar taxes – NZIER’s advice

Eric Crampton Feb 02, 2018

Sugar taxes just are not effective in improving health outcomes. When we surveyed the evidence for our report, The Health of the State, we found no compelling reason to think the things would work. NZIER’s report for the Ministry of Health reaches the same conclusion. First, some backstory and grousing about document release under OIA. Back in October, I … Read More

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Land use regulations matter

Michael Reddell Jan 25, 2018

Most local councils don’t employ economists –  or at least not ones we hear of.  The Auckland Council does have an economics unit, and the previous incumbent did some interesting and stimulating work. But yesterday on interest.co.nz there appeared an article by two of the Auckland Council’s economists which argued, so the headline proclaimed, that “evidence from across NZ … Read More

Recipe for Disaster

Eric Crampton Jan 25, 2018

I didn’t enjoy the Christchurch earthquakes. But at least as bad as the earthquakes were the depressing policy failures that followed. Policy moves stoked regime uncertainty and stymied recovery. When I started in at the Initiative, I’d asked Oliver if we’d be able to take on earthquake policy as part of the deal. Wellington’s earthquake-prone, and I wanted us to … Read More

Trade agreements and the new TPP

Michael Reddell Jan 24, 2018

And so it appears that agreement has now been reached on a TPP-like agreement, minus the United States. We haven’t yet seen the details (although this MFAT note is useful), but all the comments late last year suggested that the new agreement would stick as closely to the previously-agreed, but not ratified, TPP as possible (but presumably without … Read More