Wednesday, 29 June 2016

Auckland housing

The Spinoff knows how to frame things:
My piece there summarises a few things on Auckland's housing affordability crisis. Ultimately, it comes down to incentives.

A snippet:
Over the past four years or so, we’ve achieved a generalised political consensus in Wellington, across parties and agencies, that the bulk of the problem comes down to statutes and council regulations that make it too hard to build out or up.

So far, it might sound like I am blaming Auckland Council for the entirety of this mess. But that would be far too simplistic. Would you blame the birds for flying, the children for laughing, or the sharks for biting? No. Or, at least you shouldn’t – even if some people lodge objections to new playgrounds because of the potential for loud laughing children.

Councils operate within financial and legislative constraints. The problem is that what is best from the perspective of council or any councillor can differ from what is best for the country.

But just as it is too simplistic to just blame Council for this, so too is it too simplistic to just blame the Resource Management Act.

The RMA lets councils set whatever district plan that councils want to set. It doesn’t force councils to be very restrictive, though it doesn’t make it easy to subdivide. What the RMA does do is make it very hard to amend a district plan once one is set.

There are reasons that Auckland Council has taken years to produce the unitary plan. And, there’s also a reason that local objections have had so much sway.

Just look at the mess in Auckland where a developer wanting to build housing for 1500 households in an old gravel pit at Three Kings, turning much of it into parks and open spaces, has bought almost a decade’s worth of objections and processes and hearings. How can anybody build anything to scale under those conditions? In the middle of a housing crisis, with daily news stories about the number of children having to live in cars with their parents because there are not enough houses to go round, NIMBY activists block new construction.

Every time a NIMBY cries, an angel has to sleep in a car, or in a garage.

It follows on from my chat last week on housing affordability with Bryan Crump on Nights at Radio New Zealand.

Enjoy!

Tuesday, 28 June 2016

Moderate drinking - the right wing think tank perspective

Otago Uni's come out with another study on cancer risks from moderate drinking.

I just can't get too excited about these. Moderate alcohol consumption reduces your risk of some stuff and increases your risk of other stuff. On net, drinking about a standard drink per day reduces your risk of dying of anything by about 15% relative to baseline. Drinking more than about four standard drinks per day increases your risk of dying relative to baseline. And it's not like they get that number from adding up all the bad things and netting out the good things: they just look at alcohol consumption and who died, then run the risk curves correcting for as much as they can.

So it doesn't really matter whether cancer turns out to be much worse or less bad than expected. However bad it is is already in the mortality stats, along with however good it is on other stuff.

Eileen Goodwin at the ODT got in touch with me asking for comment on the story. Here's what I told her:
“Alcohol consumption has known cancer risk, even for moderate consumption. But moderate consumption of alcohol also has offsetting health benefits in other areas. And so more interesting work looks at the effects of alcohol consumption on overall mortality risk. And that work finds that drinking about a drink a day reduces your risk of dying, from any cause, by about 15%. Drinking more than about 3 or 4 standard drinks per day increases your mortality risk. So, if you have a family history of cancer, knowing about the cancer-specific risks should encourage you to avoid drinking to excess. But it would be a shame if health-conscious people switched from a drink a day to abstinence, fearing the cancer risk, and wound up at higher overall risk from heart disease because of it.” 

If it is of any interest, here are the results from DiCastelnuovo et al’s metastudy looking across many different studies tracing out the mortality risks of different levels of drinking. The baseline risk, 1.0, is established with reference to non-drinkers. When no former drinkers are in the reference group (dark line, panel A below), mortality risk is minimised at just under a standard drink per day. The “reduces risk of dying by about 15%” claim in my quote above is based on that dark line.
The study is available here.


I guess there wasn't room for the "reduces your risk of dying by 15%" if the space was needed for the "right-wing think-tank" part. Here's what was used:
Seeking comment, the Otago Daily Times contacted brewing giant Lion, where a spokeswoman suggested the newspaper contact right-wing think-tank The New Zealand Initiative.

Initiative head of research Dr Eric Crampton said people who cut their alcohol consumption risked losing potential benefits. Dr Crampton said he accepted moderate alcohol consumption was a cancer risk.

"But moderate consumption of alcohol also has offsetting health benefits in other areas.

"And so more interesting work looks at the effects of alcohol consumption on overall mortality risk.

"It would be a shame if health-conscious people switched from a drink a day to abstinence, fearing the cancer risk, and wound up at higher overall risk from heart disease, because of it,'' Dr Crampton said.

Thursday, 23 June 2016

Risk averse schools

The government keeps enacting legislation with potential for substantial fines for getting things wrong. The government then keeps being surprised when schools take a very risk-averse attitude to compliance with those rules despite ministry assurances that, so long as they're following and documenting sound practice, they have nothing to fear.

This time it's the Vulnerable Children Act
It has traditionally been a free and convenient way to accommodate students on school trips, but new legislation could spell the end for billeting.

As schools work out the best way to approach the Vulnerable Children Act some have canned billeting altogether because of fears they could be liable if something happened to their students, while others are police-vetting every parent willing to take in billets.

Principals say billeting has become a "grey area" for schools, despite the Ministry of Social Development saying parents involved in billeting are considered volunteers, making them exempt from mandatory safety checks.
Is this required?
Sandy Pasley, president of the Secondary Principal's Association, said exactly what was required of schools around billeting was a "grey area".

If a decision was made at a ministry level that it was critical to police vet parents willing to take in students then more schools would consider paying for accommodation, making school trips cost more.

Schools were asking for more guidance over the legislation as they came to terms with it, Pasley said.

Sue Mackwell, the Ministry of Social Development's national children's director, said mandatory safety checking did not apply to volunteers, and parents billeting school children were volunteers.

Katrina Casey, head of Sector Enablement and Support at the Ministry of Education, said the ministry had developed a resource that provided an overview of police vetting requirements under the new Act, and had held workshops to help schools better understand it.
Perhaps the government should spend a bit of time figuring out why schools don't seem to trust the ministries to behave reasonably.

Anecdotally, I've also heard of schools that have started using scaffolding rather than stepladders to replace lightbulbs because of the rules around working from heights.

Meanwhile, real estate agents don't know what counts as good enough for having taken all "reasonably practicable" measures to ensure health and safety during open homes:
Some open home registers now require potential buyers to formally acknowledge they have read a list of risks and hazards, will follow the salesperson's instructions on how to avoid them, and agree to closely supervise any accompanying children.

Christchurch house hunter Mel Street has attended at least 20 open homes since March and first noticed the beefed up health and safety rules about six weeks ago.

On two occasions she was asked to sign a waiver saying she had read the list of hazards - such as tripping on a laundry step - and took responsibility for any injuries she might suffer.

"I thought it was really odd, very much treating me like a child. It felt very American, cover your back and don't sue me for anything."
If you don't know what counts as 'reasonably practicable' as it would be judged after a freak accident by somebody who might be happier to throw you under a bus than to acknowledge that low probability events happen sometimes, and where the penalties are big, you're going to go a bit over the top in proving you did enough to avoid the risk. It is not hard to blame people for thinking Worksafe is unreasonable when Worksafe assigns $40,000 fines for not wearing a helmet on a quad bike.

One of the things I loved about moving here from the States in 2003 was the absence of this kind of nonsense. If the UN doesn't want Helen Clark to run things there, can we get her back as Prime Minister? This kind of thing didn't happen on her watch.

Tuesday, 21 June 2016

Failure of backward induction

Were this story about an economics student in a game theory course, the student should have been failed on the spot.

An Auckland university physics student emailed her lecturer, two weeks into her physics course, with a proposition: the lecturer and his wife should join her for an adventure in Bali.

A lecturer receiving this kind of email has to forward it on to the boss.

Departmental lore at Canterbury had it that, a long time ago, a former lecturer there had received a similar proposition. He told her that while such an adventure would certainly be enjoyable, she would afterwards be able to hold him to ransom for the present discounted value of his lifetime earnings - and no amount of present enjoyment could compensate for that.

Back to the current case:
New Zealand Union of Students' Associations president, Linsey Higgins, said teacher-pupil relationships did happen and sexual harassment policies needed to be clearer. Higgins said an individual's reading of a situation can play a part in what a complainant may consider sexual harassment.
"There is the interpretation of the academic, who may have thought it was something along the lines of sex-for-grades. That assumption could have been leapt to.
That's one layer to the problem.

But add in the Dean's perception. Suppose that the lecturer never replied but the email came to light later on. If the Dean believed there could have been a sex-for-grades thing, whether or not anything transpired, it's risky for the lecturer. Can you prove that you didn't have some non-email conversation later on that led to a sex-for-grades thing? Hard to do. Safest course then for the lecturer is to forward on the email immediately to demonstrate innocence.

Good students of game theory would then not make any sincere proposition until it were safe to do so, but that's difficult where you never know who will be your lecturer in a subsequent year or your supervisor.

Lecturers not having received such requests should take it as testament to the quality of their teaching of game theory.

Monday, 20 June 2016

90 Days

Motu's had a look at the effects of the 90 day trial legislation. Under that legislation, employers could hire employees on a trial basis and dismiss them relatively easily within that 90 day window. Supporters of it expected it to encourage employment of riskier employees; opponents expected substantial churn: that employers would somehow figure it made sense to hire people for three months, fire, rinse and repeat.
The Motu study, undertaken by Nathan Chappell and Isabella Sin, two fine Canterbury economics graduates, uses a beautiful little natural experiment. Firms smaller than 20 employees were allowed to use the provision; those over it were not. At least for a time. Afterwards, it extended. But you had a nice little period in which there was a discontinuity at 20 employees. They then looked at hiring data in for firms in the 15-25 employee range. If the bill had effects, that's where the difference would show up.
Using that experiment they find, well, very little in the aggregate. There was no particular boost to employment, but neither was there any churn. It didn't seem to do anything at all.
But there is a bit of a problem in focusing on the aggregate. If you're looking at effects across all firms, and only a minority of firms would ever want to use the trial periods, then if there were an effect for that group of firms, you likely wouldn't see it in the aggregate data. The data doesn't let them tell which firms actually elected to hire new employees on trial arrangements, and which offered permanent contracts from the get-go.
Or to put it another way, suppose that some medicine reduced your chance of death from a relatively uncommon disease by 10%. You wouldn't notice any effect at all in overall aggregate national death rates. But you would notice it if you looked in the places where it were used.
This could matter. They cite MBIE work showing greater uptake of trial periods in construction and wholesale trades and low use in education and training; they then find a about a 10% increase in hires among small firms in industries known to use trial periods who were eligible to use trial periods as compared to small firms in the same industry that were just a bit too big to use trial periods. Those small firms eligible for 90-day trial periods in high-use industries had about a 7% increase in long-term hires.
Evidence that it particularly encouraged employment of riskier employees is rather weak, or at least riskier as measured by things like being a former beneficiary.
On the whole, it looks like the policy provided an increase in employment in construction companies and wholesale trades, no increase in churn or dismissals. If you think that people bear substantial psychological costs of a 90-day trial period where actual dismissal rates are trivial, then you might not like the policy. If you think that those are likely to be minor relative to the employment benefits in the sectors that need it, then the policy remains a good one. And if you're going to weigh the psychological costs of uncertainty for employees under trial periods, weigh too the psychological costs for employers having to make hires under conditions where firing is very difficult.
It might not be as beneficial as we had hoped at the outset, and so it might have been a mistake when evaluated against other beneficial policies on which the government could have expended political capital (youth minimum wages, for example), but it's a policy well worth continuing.

Saturday, 18 June 2016

Stoned driving

It's hard to get a good read on the risks of driving while stoned. It matters because it's one of the less crazy objections to marijuana legalisation: if penalising driving while stoned is hard, and if it is risky, and if consumption increases under legalisation, that could be a cost of legalisation.

Existing estimates are a bit of a problem. Studies finding associations can fail to account properly for alcohol use, or for that cannabis in the system does not necessarily indicate recent use. There are blood tests that can more reliably indicate acute intoxication, and saliva tests, but urine tests don't say much about recent use.

Ole Rogeberg and Rune Elvik look back at a couple of meta-studies and tries to make sense of things. They go back and properly account for how different studies measured drug use, what other confounding factors were included, and whether there were any dose-response relationship established.

They find current metastudies overestimate the effects of cannabis on crash risk. They note that the relative risk of driving at 0.05 BAC is 3.6. Controlling for alcohol use reduces the relative risk of cannabis use from about 1.7 to about 1.2.

They conclude:
A comprehensive review of the literature on acute cannabis intoxication and road traffic crashes finds that acute intoxication is related to a statistically significant risk increase of low to moderate magnitude. Higher estimates from earlier meta-reviews were found to be driven largely by methodological issues - in particular, the use of counts data without adjustment for known confounders. Correcting for these issues, the pooled estimates from these reviews were in line with the results from the updated and more extensive review.
How big is a relative risk of either 1.7 or 1.2?
A few "driving while" risks: 
It is frustrating to watch America legalise cannabis, state-by-state, and the UK debate whether legalisation or decriminalisation is best for all drugs, while NZ remains stuck in the stone age.

A comprehensive review of the literature on acute canna-
bis intoxication and road trafc crashes nds that acute
intoxication is related to a statistically signicant risk
increase of low to moderate magnitude. Higher estimates
from earlier meta-reviews were found to be driven largely
by methodological issuesin particular, the use of counts
data without adjustment for known confounders.
Correcting for these issues, the pooled estimates from these
reviews were in line with the results from the updated and
more extensive review. Remaining selection effects
discussed in the Alternative interpretations section may
complicate causal interpretations of the pooled estimates.
A comprehensive review of the literature on acute canna-
bis intoxication and road trafc crashes nds that acute
intoxication is related to a statistically signicant risk
increase of low to moderate magnitude. Higher estimates
from earlier meta-reviews were found to be driven largely
by methodological issuesin particular, the use of counts
data without adjustment for known confounders.
Correcting for these issues, the pooled estimates from these
reviews were in line with the results from the updated and
more extensive review. Remaining selection effects
discussed in the Alternative interpretations section may
complicate causal interpretations of the pooled estimates.