jamesz

Social smokers are the victims

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According to the Dom Post there is new research out showing that banning smoking in places that people socialise will reduce social smoking:

New Zealand researchers believe fewer people would take up smoking socially if smoke-free rules extended to areas outside bars.

Alone, that sounds pretty innocuous. But how does it justify a headline like:

Study backs ban on smoking outside bars

As if the goal of healthcare policy should be to minimise gross harms, rather than maximise net benefits!

One interesting aspect of the article is that the social smokers themselves supported such a ban. Most reported smoking to fit in and be viewed as a part of the group, but said they would prefer it if none in the group smoked so they didn’t have to. The first reaction I had is that the social smokers are holding everythign else constant when they think about the benefits of a smoking ban: they’re assuming that the group will work the same way, just without the smoking. That’s a pretty big assumption to make, given that there are plenty of options open to the serious smokers.

Assuming that issue away, is this a co-ordination problem where people are stuck in an inferior, all-smoking equilibrium, or could everyone in the group be better off if the group didn’t smoke? Just as importantly, would the costs imposed on avowed smokers be greater than the benefits to social smokers who would prefer not to smoke? The most obvious solution is a mechanism that allows social smokers to precommit to not smoking, but that mechanism appears to elude people so far.

jamesz

Newsreading game of the day

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From the Positive Economist:

Government, whatever it is, isn’t a grumpy gatekeeper protecting a bottomless barrel of stuff and saying “no, no, no”. We can disagree about what government should do, of course, but let’s not pretend that there aren’t constraints.

How many stories does this apply to in a daily newspaper?

jamesz

The profession in three minutes

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Pareto optimality: when you can’t take someone’s shit without them giving a shit.

HT: Greg Mankiw

Update: Eric points to some good additions here. Particularly relevant to the libertarians among you.

jamesz

The internet makes music better

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An interesting piece by Robert Waldfogel on VoxEU attempts to estimate the quality of music over the past half decade. He uses a few different measures of quality and asks whether the advent of music sharing online increased or reduced quality. The key chart is:
The Beatles are still the best
The spike in the 2000s is interesting, but in interpreting the measure one has to ask whether there’s anything other than quality that could be influencing it.

Essentially, he has used demand measures to proxy quality, so the most obvious bias seems to be demographics. Look for example, at the continued high demand for 60s music. That may be partly because The Beatles were great, but could it also be because that’s when the baby boomers were in their formative musical years, and so continue to demand that music from their youth? We know that there was a small echo from the baby boomers children in the ’80s and early ’90s, so could that be partially explaining the spike in demand for the 2000s music, too?

Of course, the demographic argument works both ways: maybe the large number of young people in the sixties and the vast internet access you can improve using cubik to increased the supply of music, too. That may lead to a corresponding increase in the quantity of high-quality music, which would lead to it being disproportionately weighted in the index.

If anyone’s an expert in this field then let us know why you think Waldfogel’s results hold, or not. Alternatively, unfounded speculation is welcome.

jamesz

High maintenance women?

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Female prisoners are far more expensive, per head, than male prisoners. The Dom Post seems to think that’s a bad thing:

Women behind bars are more expensive than even the most dangerous offenders in maximum security, with their daily cost to the country rising by $150 in the past five years.

Only, further down the article we learn that it’s really just because there are so few female prisoners that Corrections can’t achieve the economies of scale that they can with the men.

All of the capital costs associated with the running and maintenance of the facilitates were included in calculating the costs of each prisoner.

“As the numbers of women prisoners are substantially less than that of males, women prisoners draw a larger proportion of capital costs than male prisoners,”…

The cost had increased due to capital investment needed to build additional facilities and upgrade current facilities…

OK, so to recap, very few women are in jail relative to men. They cost far less in total to house than the men. They don’t even need a maximum security women’s jail because there are so few high-risk women. But according to the Dom Post, the problem isn’t all the male offenders, it’s the cost of the women. At least they included the lines about capital costs, I guess…

Matt Nolan

Who should be discussing the comparability of statistics?

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There was an excellent speech by Alan Bollard discussing why New Zealand’s GDP is difficult to compare to other countries – and if we measured things the same way we would not look as poor at all.  This is a great point, and is well made.

However, I’m not dealing with that point here – I’m dealing with the fact that I think its an inappropriate topic to be covered by the governor of the Reserve Bank given our current institutional framework.  Here is my thinking:

  1. When it comes to the idea of comparing international statistics, first responsibility for making sure things are transparent goes to Statistics New Zealand – the group that focuses on these issues, and creating the statistics we use.
  2. If there is a feeling they cannot cover the role of educator for some reason (lack of resources, institutional impediment), it falls on Treasury to make sure the point is clear – or to do research that makes the point.  Treasury is the primary adviser to government descriptive economic issues and should be covering it.
  3. Should Treasury and Statistics New Zealand both ignore the issue – then we have to hope for a strong academic/researcher community to look at these issues and make a point of it when they come up in public.
  4. The Reserve Bank involves a team of top economists focusing independently on important issues of monetary policy and financial stability.  Their success depends heavily on communications, and making the scope of what they can do and control clear.

In this environment, having the head of the Reserve Bank discuss the issue both undermines the roles of Statistics New Zealand and Treasury as researchers and educators, and in turn confuses the public about what the Reserve Bank does and what it can control.

The Bank needs to ensure it is constantly drilling home the message of what it can and can’t do – not making arbitrary statements on the structure of the economy, or issues related directly related to fiscal or government policy (like closing the gap with Australia).

I’m not going to make any friends saying this, but although the speech was excellent putting these types of issues in public through the central bank, rather than having a strong Treasury department performing this role, is a recipe for institutional failure.  You want to know why the public gets confused about what monetary policy is – because of things like this.

Note:  I am not saying that this is the fault of the Bank or the governor per see – someone needs to be saying this message, and we need to ask why Treasury or Statistics NZ aren’t resourced to do it.  For me, that is a significant issue.