Cupcake Freedom

Campbell Live tonight reported on Auckland Council's shutting down of some kids' cupcake stands at a local mall. Because the mall ran the kids' day once a month, according to the story, it then counted as a commercial market. And so the kids had to produce their food in a commercial kitchen.

I initially thought that the new Food Bill was to blame. It was introduced back in 2010 and got a fair bit of push-back in early 2012. But that cannot be the case. Submissions on the Bill closed only a month ago. Since I had never heard of Councils in NZ hitting kid bake stands like this, and as Auckland was blaming national regulations, I incorrectly assumed that the Food Bill had to have gone through. And so I apologise for blaming the Food Bill and its sponsor, Kate Wilkinson.

I still would very much like to know whether there is basis in existing national regulations for Auckland's rather heavyhanded actions in this case. Either the regulation has existed and hasn't been enforced elsewhere, the regulations have changed, or Auckland's interpretation is incorrect.

The original post follows below. It is based on an incorrect premise. I have run a strikethrough tag through it so that it's obvious that it ought not be relied upon.

Update: And I thank @mellopuffy for the correction.
Update 2: More detail here.

Kate Wilkinson promised us this wouldn't happen. And yet here we are.

Her op-ed of January 2012 sought to put to rest petitioner fears that the Food Safety Bill would shut down a lot of small scale entrepreneurship. She wrote:

Those behind the online petition opposing the bill claim it will seriously impede initiatives like community gardens, food co-ops, heritage seed banks, farmers' markets and roadside fruit and vegetable stalls. This is nonsense.

At most, people involved in such activity, where it presents a low risk, will be provided with information.

Events such as sausage sizzles, home bake sales, and other fundraising events will still occur as they always have.The bill is intended to protect, not harm such events, as the bill's critics would have us believe.

Bartering of food is currently included in the Food Act 1981. The proposed bill simply clarifies that those bartering with food, as part of a food business, must ensure it is safe and suitable.

Many small-scale bartering activities will only be subject to food handler guidance – for example, those bartering home-grown produce for goods and services. However, larger scale bartering of food exists and it is appropriate that those enterprises are subjected to the same risk-based measures as those selling their food products in a more conventional manner.

I wrote:

So is the new regime worth the cost? That depends on the compliance costs that will be faced by small and mid-sized traders. Wilkinson assures us that small traders won't face onerous burdens, but I'd really prefer seeing proper analysis of the Bill from someone like Otago's Andrew Geddis. And we have to keep in mind that a substantial proportion of the costs Wilkinson cites might actually be voluntary choices consumers are making that, on lucky draws, yield tasty goodness any diminution of which consequent to regulation ought be counted against the Bill's possible health benefits. Banning me and others like me from having my hamburgers medium-rare might save the health system a bit, but it'll certainly cost me some utils. Equally bad is what a big fixed-cost regime would do to food startups. I really hope that the legislation isn't as costly on those two fronts as some folks fear; I'd love to see independent legal analysis.

So: I was worried about compliance costs on small traders; Wilkinson promised there was nothing to worry about.

Tonight's Campbell Live has Auckland Council shutting down a mall's efforts to support young entrepreneurs. Once a month, they let the kiddies set up little stands selling their cupcakes. Council says that they're forced to shut it down because of Kate Wilkinson's Food Safety Bill. Hit the link to watch the video.

Kate, if you were serious about what you wrote in 2012, you will fix this, right? If your op-ed was right, Auckland shouldn't be interpreting your legislation this way. Please tell them, and tell every other Council, that they are not required to do what Auckland is doing. The problem is Auckland's interpretation, right? Because when I tweet stories from the States about Council health people knocking over kids' lemonade stands, I usually append an #emigrate tag.

Surely here in New Zealand we're not going to need a cupcake equivalent of this?

Food Fight

Oh, Manitoba. Just when you start looking sane, you go back to your old wacky ways.

Recall that Manitoba is the province where you can't sell a potato without, well, hassles.*

Now, read this one and weep. Since I was a kid in Manitoba, the government made much fuss about agricultural diversification, wanting farmers to move to more processing and oddball thin-market crops.

The Cavers at Harborside Farms are a great example of how this can be done well. They raise Berkshire hogs outside of Pilot Mound, a small town a couple hours southwest of Winnipeg. They started curing hams following old Italian recipes. Bartley Kives reports:

In May, Manitoba Agriculture Food and Rural Initiatives awarded a $10,000 prize to Harborside Farms, after inviting owner Pamela and Clinton Cavers to compete in a contest called the Great Manitoba Food Fight in Brandon.

The cash prize for the Cavers' pastured-pork prosciutto was intended to help the couple further commercialize the cured meats they had been producing on their farm since 2008, using traditional Italian recipes.

In June, inspectors from a different branch of MAFRI ordered Harborside to stop selling all of its cured meats, known in culinary terms as charcuterie, which had appeared on the tables of higher-end Winnipeg restaurants such as Pizzeria Gusto and Bistro 71/4.

The Cavers, who also hoped to sell their product at De Luca's Specialty Foods, claim they complied with the order.

But on Wednesday, as University of Manitoba environment students were about to tour the Harborside grounds, a pair of inspectors drove up and seized the couple's entire inventory of charcuterie -- about 160 kilograms of the cured pork and beef products known as prosciutto, lonzino, capicollo, bresaola, salumi and soppressata.

The Cavers said they were each handed $600 fines.

"The fine was for selling food unfit for human consumption. This was the same food the agriculture minister ate in May," said Pamela Cavers, referring to MAFRI Minister Ron Kostyshyn, who tasted Harborside's prize-winning prosciutto at the contest in May.

So, was anything wrong with their cured meats? No. Absolutely nothing. But they didn't follow the approved process. Why? Because there wasn't one. They were following traditional processes, the food was safe, and they'd asked the government for advice on making sure they were also compliant with any process specs that the government might wish to impose.

The provincial inspectors took no issue with any aspect of the farm aside from the charcuterie operation, whose entire processes they deemed unsatisfactory, Pamela Cavers said. A June inspection yielded an order to build a separate drying room and acquire instruments to monitor pH levels and moisture, among other issues, she said.

The Cavers said they had been attempting to obtain specific guidelines for producing artisanal charcuterie, but could not receive direction from the provincial food development centre in Portage la Prairie.

"They said they had no idea what to compare it to," she said, adding officials had no experience with charcuterie. She said a call to the minister's office during the Wednesday raid yielded advice to call the chief veterinary officer. "They didn't even know what charcuterie was," she said.

Were the Cavers selling unfit food? No. An informed correspondent tells me that Manitoba Health has no adopted procedures as yet for dry cured meats. The Cavers tried proving that their product was safe, by various bacteria, moisture, and pH tests at the Portage Food Lab. But there's no standard that the government could point to showing whether it was good enough.

Because Manitoba Agriculture, Food and Rural Initiatives (MAFRI) does not have Manitoba Health standards against which they can judge things, they just took all of the Cavers' stuff. Even if the Cavers perfectly followed all of the Italian standards, they're still in violation of Manitoba law. Because they're not following Manitoba standards. Because nobody has written any Manitoba standards.

A rational province would, where no official provincial standard exists, simply adopt an existing proven standard from an outside trusted source and verify that a Manitoba producer's practices meet that standard. Alternatively, perhaps somebody in Manitoba should start trying to get approval to sell chocolate-coated cotton.

There's a petition up here wishing that the Manitoba government be sensible. I hope it's successful.

* See:

• Canadian agriculture is completely screwed up
• Manitoba potato monopoly
• More Manitoba potatoes
• Manitoba potato monopoly...update
• Manitoba potatoes - again!
• Ceasefire in the spud wars

In which we welcome Shamubeel Eaqub and revisit an old chestnut

The excellent Shamubeel Eaqub is now blogging as part of the team over at TheVisible Hand of Economics. Shamubeel has been a regular commenter at TVHE and is often quoted in the media; it is great to see him now blogging. Eric linked to Shamubeel’s first post yesterday in his Monday round-up.

Shamubeel was commenting on this story about National’s latest housing policy, in which “the number of first home buyers eligible for KiwiSaver deposit subsidies will double”, but buyers “will have to save a bigger deposit before they qualify for Government assistance”. Again, I find myself asking, What is it about housing policy that leads to people forgetting basic economic principles? The two quotes that jumped out at me were the following:

"Key said the requirement for a bigger deposit was necessary to avoid throwing fuel on an already overheated housing market in Auckland."

And David Shearer’s

"I am also determined to reduce speculation-driven demand in our housing market. Labour will restrict sales to overseas speculators and clamp down on speculators here through a capital gains tax on houses bought over and above their own home."

So Shearer  wants to make housing more affordable partly through taxing it and partly through a policy that restricts the nationality of who can own a rental property but won’t affect the number of people wanting to live in houses or the number of houses available for living. I have discussed these ideas before (here and here) so won't belabour the point. But now Key wants to join the party by promising to make housing more affordable by simultaneously shifting the demand curve to the right and then shifting it back to the left to prevent price increases! For sheer internal inconsistency, you have to say that National’s policy takes the cake here.

To be fair to both parties, both are also offering solutions to act on the supply side as well. And both parties think the other’s policy is crazy, so they have that right as well. But it wouldn't it be great if we could get beyond these silly games and have the political discourse focus on real policies?

Disincentives

My but CERA and CCDU are building a big bucket of bad incentives here. From the front page of yesterday's Christchurch Mail, unfortunately unlinkable.

HIGH STREET business owners Nicky and Joe Arts have watched their livelihood slowly die in front of them.

Almost three years on from the first earthquake, their heritage shopfront and factory remain suspended in time, as if the February 2011 earthquake were only yesterday.

A year ago, they were told their business was scheduled to become part of the Southern Frame in the central city blueprint. Since that first notification, they have not been told anything further.

They own one of many titles dividing up the 1905 heritage Duncan’s Building into shopfronts. Arts the Printers and Card Makers has been a family business since the 1960s.

After three years’ fighting to save the building, the street and their business, they say they feel like broken records.

‘‘It’s basically a nightmare for us,’’ Joe said. ‘‘ But it wasn’t the earthquakes that were nightmares, it was what came after.’’

Their frustration with the Government-run clean-up and rebuild is at tipping point.

Having been locked out of their business for two years by Cera, they have lost a lot of their customers.

While much of High St is now open and accessible, the block between Tuam and St Asaph St remains closed off. Parts of their neighbour’s shopfronts remain on the street.

‘‘We’ve become very angry these last few years,’’ Nicky said. ‘‘ What’s frustrating is the complete lack of progress.’’

Attempts to get any information out of Cera have simply fallen on deaf ears.

The owners of the adjoining shopfronts in the same building have contributed nothing to try to prop the building up.

One of them is uninsured, and the other has little hope of recovering insurance payouts.

The Arts repaired the two adjoining walls to save their shop.

‘‘We went into massive debt to stabilise those brick walls, without either of them paying a sodding cent,’’ Nicky said.

Between the September and February earthquakes, the Arts had more than $150,000 of reinforcing steel installed, meaning they now meet 73 per cent of the building code.

However, because they adjoin unstable shopfronts, they have very little hope of opening theirs.

‘‘In hindsight, we’d have been better off not to do it. We could have just walked away, but it did save lives,’’ Joe said.

Nicky is simply anxious to get some answers. She does not believe a Government offer would allow them to walk away without significant financial burden.

‘‘Cera and CCDU just do not know what they’re doing,’’ she said. ‘‘We just want to know, are they going to purchase us for the frame or not? If yes, get on with it . . . If not, hurry up and open the street. For God’s sake, they need to make a decision.’’

Does CERA really want everyone in Wellington to get the idea that it's better to make zero investments in their heritage buildings? Because that is what they're doing.

If you own a yellow-stickered Wellington building that's next door to another yellow-stickered building, you can invest in making the property safe and save lives. But if the neighbour doesn't, then you won't be allowed back in the building for three years after a quake and you will probably be bankrupted because of your investment in making the building safe. Is this REALLY the lesson that CERA wants Wellington to take? Really?

It's been darn near three years. "Oh it's complicated and these things take time" starts wearing awfully thin.

Can consequences this foreseeable really be unintended?

Imagine this as an intermediate microeconomics exam question. Suppose the government were to bar firms taking government contracts from paying their highest-paid employee more than three times what they pay to their lowest-paid employee. What consequences might you expect ensue?

Here are a few, for starters:

• There would be a rapid shift towards outsourcing of tasks performed by lower-paid workers. An economic consultancy company would hire a temp service to provide secretarial services and would contract with a janitorial services provider rather than have secretaries and janitors on staff. A construction company would have a rather tougher time - they'd be more likely to split into several component parts all selling services to a central agent who contracts with the government. So there could be a shoveling services company, a truck driving company, and a project management and procurement company. You'd have fairly flat payscales within companies, but large differences in salaries across companies. This would be inefficient, but it would likely be the best they could do given the rule.
• Universities running consultancy arms for contract research by academics would have to run those as more explicit external shells. The government throws millions of dollars at the University of Otago for ban-everything studies under HRC grants. If they can't disguise the hourly rates in the contracts to make it look like the researchers are just putting in tons of hours, they'd have to put the contracted lecturers and profs onto part-time contracts with the University, where salary scales would range from the guys who mow the lawns to the people who teach brain surgeons how to be brain surgeons, and have a separate consultancy company where everybody earns a lot. 
• If we think that Universities are under contract for government already in the whole teaching-students business, then they'd just have to run the same outsourcing arrangement suggested above. Or, think of it this way: would YOU want to have your brain surgery conducted by somebody trained by somebody earning three times what you can make mowing lawns? 
• Now suppose that the policy were more comprehensive than I've suggested: they also work hard to look through these kinds of contractual setups and bar firms from putting in tenders for government contracts where it looks like they've done this.
• It would be almost impossible to police. Some companies already find it optimal to contract with a professional maintenance services company rather than do things in-house; others like doing things in-house. Who's to say which organisational decisions were motivated by the rule and which derived from other considerations?
• If they could do it, then you'd effectively have the end of government contracting-out for services except on very minor scale. The whole thing seems designed to kill private-public partnerships like:
• Having specialist companies tender to construct roads rather than having some Ministry of Public Works do all the construction for the government (and losing the efficiencies of competition and private tendering);
• Contracting in external experts for assistance rather than keeping a bunch on government staff. This sucks in a small country where you might need particular kinds of experts only infrequently.

That's just a start; other very foreseeable rather bad consequences are left as an exercise for the reader. For starters, think about incentives to acquire human capital.

Nobody would be daft enough to suggest such a thing though, right? Nope.

The Government should stop giving contracts - and knighthoods - to companies that pay their bosses more than three times their lowest-paid workers, an economist has suggested.

Who? Maybe some crank consultant? Nope. The University of Victoria at Wellington's Geoff Bertram. 

I caught this over the weekend but hadn't gotten around to blogging it; glad to see David Farrar and Matt Nolan caught it too. Matt only thinks Bertram's being "reasonably disingenuous"; I'm less charitable. 

To advocate policies like this, as an economist, and to pretend that a great big bucket of awful wouldn't ensue pretty directly, is worse than disingenuous. Bertram gets to grandstand about what a caring guy he is, let his followers believe that horrors wouldn't ensue, and just trust in that no government would be batty enough to implement the policy. This kind of policy advocacy smells more of charlatanry than of economics. I really really hope that the Herald has quoted him incorrectly as I can't believe that any economist could seriously think this a desirable policy. Care about inequality all you want, but the appropriate levers are tax and redistribution policy, not wage mandates.

If Bertram weren't misquoted, I've a few questions for him.

1. Salary differences within government are often well in excess of the 3:1 ratio he recommends. The Prime Minister doesn't make a lot of money in the grand scheme of things, but he makes well over three times the lowest-paid government worker. Even if the lowest government salary paid anywhere in the system were $40,000, that would constrain the highest salary to $120,000. The Prime Minister earns $419,000. I expect a substantial part of the higher echelons of government earn well in excess of $120k. The base salary for a backbench Member of Parliament is $144k. Should we extend his preferred 3:1 rule to all of government, or just to contractors? 
2. If he only wants it to apply to contractors, on what basis does he make that distinction?
• Note that, if it applies only to contractors, the main large effect of the rule would be to end outsourcing of government work. We'd have a massive expansion of the civil service and an end to what benefits come from competitive tendering. I would put 20:1 on that Bertram's rule, in this interpretation and if enforced, would have this consequence. It is so obvious an effect that it kinda has to be something that the policy proponent wants to have happen. So, Geoff, if this is how you want it, why didn't you just call for a ban on outsourcing and an expansion of the civil service?
3. Private hospitals provide services under contract for government. This would end pretty quickly under Bertram's rule if it applied only to contractors. But suppose it's comprehensive and applied also to government hospitals. Geoff, do you prefer:
1. That the people who cut the grass, and the cashiers at the cafeteria, get salary increases so that nobody is earning less than a third of what the country's top brain surgeons earn? This may have consequences for the overall health budget and the overall quantity of services that the health system can provide. Or,
2. That the people who fix the brains get pay cuts so that none of them earn more than three times what the people who cut the grass earn? This may have consequences for the quality of brain surgery. 

I weep for the quality of thought on the left in New Zealand. Australia gets Andrew Leigh. We get, well, this.

Blind to others' ends

Marion Nestle's op-ed in the New York Daily News is breathtaking.

She begins:

If we want Americans to be healthy, we are going to have to take actions like this - and many more - and do so soon. It's long past time to tax sugar soda, crack down further on what gets sold in our schools, tackle abusive marketing practices, demand a redesign of labels - and extend the soda cap, no matter how controversial it may seem. This must be the beginning, not the end, of efforts toward a healthier America.

In short, we need a series of serious changes to make the healthy choice the easy choice. The soda size cap is a nudge in that direction. You will still be able to drink all the soda, and down all the sugar, that you want. The cap on soda size makes it just a tiny bit harder for you to do so.

...Most people eat whatever size is in front of them - the "default," in public health-speak - and are content with that amount. So a reasonable goal of public health intervention is to change the default drink to a smaller size. Hence: Bloomberg's 16-ounce size cap. From my nutritionist's perspective, a 16-ounce soda is still generous. Just one contains the equivalent of 12 packets of sugar. Just one provides 10% of the daily calorie needs of someone who typically eats 2,000 calories a day. Just one contains the upper limit of sugar intake that health officials recommend for an entire day. Once you down a 16-ounce soda, it's best to stop right there.

From my perspective, as someone who regularly shares a soda with his wife at the movies, having to leave a movie for a refill is more than a minor inconvenience and no longer being able to share a drink with your wife adds more than a minor cost. But Nestle either can't see the diversity of ends sought by those wishing larger sodas, or considers them irrelevant collateral damage.

So-called "nanny-state" measures - like bans on driving while drunk, smoking in public places and, now, selling absurdly large sugary drinks - help to level the playing field. Such measures are about giving everyone an equal opportunity to live a safer and healthier life.

I'd thought the point of drink-driving laws was the protection of other drivers. And that's how bans on smoking in public were sold, though that always seemed really rather a stretch when they started pushing for bans in outdoor areas.

The column doesn't get better.

At the moment, it is up to you to make healthier choices, but that's not easy in the face of relentless soda marketing. Governments have a responsibility to provide healthier environments for their citizens.

Yes, we're all helpless in the face of marketing. I think she needs some theory explaining why ads for soda are that much more persuasive than ads for milk and kale.

Here are some additional actions New York City should take, if only it were allowed to. Close the loopholes. The city does not have jurisdiction over sales of sodas in convenience stores and supermarkets. The state does. Gov. Cuomo denied Mayor Bloomberg's request to extend the size cap to those stores, not on principle but because he hadn't thought about it. He should, right now. Let's keep all sugary drinks to 16 ounces or less.

And what of larger families who like to share larger-sized drinks? Or buying soda for parties?

Fix the price differential. A 7.5-ounce can of soda costs twice as much per ounce as a two-liter bottle, and you can't buy just one; it comes in an 8-pack. Price determines sales. If a 16-ounce soda costs a dollar, a 32-ounce soda should cost two dollars.

Hey, let's extend her price control regime to everything. If a single toilet paper roll costs $0.25, there's clearly no reason that a 24-pack should cost anything other than $6.00. If a half-dozen eggs costs $4, then a dozen should cost $8. If a single drumstick at KFC is $1, then a 20-pack should be $20. If a night at a hotel is $100, then a week should be $700. There's no reason anybody might provide volume discounts except to foster addiction and overconsumption. If a motorbike with two wheels costs $10,000, then a car should cost $20,000 because it has twice as many wheels. Just put Marion Nestle in charge of the "Setting the price of everything" committee. It'll be great.

Tax sodas. Most people wouldn't dream of eating candy all day, but soda companies have made it seem normal to drink sodas from morning to night. Raising the price of sodas would discourage sales, especially among young people most susceptible to marketing efforts and most vulnerable to weight gain. A one-cent tax per ounce should do the trick and raise plenty of needed revenue besides.

I rather doubt that a one-cent-per-ounce tax would satisfy her thirst.

It goes on in this vein for a while. She concludes:

Actions like these will evoke ferocious opposition from the soda industry, and it will spare no expense to make sure such things never happen. We would surely hear more and more howls of "nanny-state" from those who insist Bloomberg has led us to the brink of a public health police state. Polls say that many New Yorkers oppose the 16-ounce cap and would oppose measures like this, too.

But I can't tell whether the opposition comes from genuine concern about limits on personal choice or because soda companies have spent millions of dollars to protect their interests and gin up histrionic, misinformed opposition.

Oh, those illegitimate howls of "nanny state" against a woman who wants to ban advertising of soda (if it looks to her like the marketing targets kids), ban vending machines in schools, mandate great big calorie warning labels on the front of containers, and ban 2-litre bottles from supermarkets.

The dollar is a price

Matt Nolan's bemoaned that nobody quite seems to understand that exchange rates are just a price. He would love this particular example.

The story here is bad enough: the Greens calling again for bans on foreigners buying houses in New Zealand. They say it isn't racist, but when pretty much every complaint is around Chinese buyers, I call it a dog whistle.* It's particularly galling when it's smart-growth style, Green-supported policies that have forced the property supply curve to be near-vertical and have made it possible for increased demand to be met primarily by price increases rather than by supply increases. And kudos to Prime Minister Key for batting this one down, despite its populist appeal.

But here's one vox pop understanding of exchange rates. It's always a bad idea to read the comments section of anything (except Worthwhile Canadian Initiative and maybe sometimes this blog). But here's Veda's view on exchange rates, hoisted from the 3 News comments:

The wannabe property speculators are in full swing on this thread... All those who benefit from rising prices keep pushing the emotional spin about racism...

The reality is that foreign countries are manipulating their currencies lower (which pushes our higher) using whatever brute force necessary (low interest rates and massive currency sell offs) and the result is favorable terms for buying NZ property (as our high dollar makes land in NZ cheap when earning money overseas). This is driving NZ property prices well beyond fundamentals (what working kiwis can afford) and precipitates more NZ money flowing offshore (as more and more rentals are now being held by overseas interests). [rest truncated]

Where to begin. It's likely that one country's currency would be bid up relative to others' if others pursue devaluation policies. We can argue about whether it consequently means that New Zealand should follow suit, and I can't see how we can do it in any substantial way while staying withing the Policy Targets Agreement's inflation bounds, but at least that first part isn't completely mad.

But the point of devaluing your currency is to make other countries' products relatively more expensive. You discourage imports and encourage exports by effectively dropping your country's real wages: people from your country can't afford as much when the value of the currency drops. Because real wages drop, nominal wage rigidity doesn't matter as much and employment goes up. At least in the first order. It also makes intermediate imported industrial inputs more expensive and messes up a bunch of other stuff, but we'll take that as read.**

So here's a pop quiz. If we devalued to the point where $1 NZ = $0.01 US, would it become:
a) more expensive, or;
b) less expensive
for somebody earning US dollars to buy a house in Auckland?

Hint: every dollar earned by the American would count for $100 NZD when bidding at auction.

Veda wants to devalue the New Zealand Dollar so that foreigners will have a harder time buying Auckland real estate. And, obviously, rental income being sent abroad to foreigners is entirely offset ex-ante by those foreigners buying New Zealand Dollars to purchase the property in the first place.

Why oh Why does every vote count with weight of one?

* Dogs can hear dog whistles while people can't. Kiwis who hate the Chinese hear the Greens' dog whistle; those who don't, don't notice.

** Devaluation that's consequent to proper application of inflation-targeting policies I don't have a problem with. Monetary easing to keep inflation from being too low will have the consequence of devaluing the currency, but the devaluation isn't the point of the policy. And maybe devaluation is best policy if you've a massive foreign currency debt you can't otherwise repay. Otherwise, read Nolan, linked above.

Ban the Cup

The latest research out of the University of Otago warns of the dangers of major sporting events.

It seems Rugby-World-Cup-related sex is dangerous. I can't access the original article as the journal is currently returning a 503 error code, so I'll have to rely on the newspaper reporting.

According to the New Zealand Herald, folks attending Sexual Health Clinics around the time of the Cup were surveyed. Those reporting having had RWC-related sex, about 7% of the sample, had higher risk of STDs, often reported having consumed alcohol before the act [the DomPost says 70% had consumed alcohol], and rarely reported having used condoms. From this, the authors argue for reduced promotion and availability of alcohol around future large sporting events.

Again, I haven't access to the article. But a few things come to mind.

First, sample selection is an awfully large problem here. 151 people attended a Sexual Health Clinic after having had RWC-related sex. How many people had sex after a fun night out watching the matches, didn't wind up with suspicious itches or discharges, and so didn't go to visit a Sexual Health Clinic? What was the rate of alcohol or condom use among those who failed to show up at a Sexual Health Clinic? How many of them simply had a great time without negative consequences? Recall that alcohol consumption correlates with positive sexual experiences.

A second sample-selection issue is that folks reporting RWC-related sex are probably really reporting "sex after hooking up at a RWC party or event", which won't be that different from "sex after hooking up at any party or event". And, in that case, again, is the fault with the alcohol, or is it that people going out and wanting to have a good time are more likely to drink and also more likely to think that hooking up is fun? Recall that the answer to "Do you like beer?" is a significant predictor of whether someone will have sex on the first date. The omitted underlying variable is then likely some combination of sensation-seeking, risk preference, and hedonism. Unless you control for that underlying heterogeneity, you're going to draw some awfully misleading conclusions from straight correlations among the various outcomes of that underlying agent-type.

Finally, here's how the Herald describes "RWC-related sex":

People who had RWC-related sex were defined as New Zealanders who had sex related to the RWC or other associated events, New Zealanders whose sexual event leading to the clinic visit was with an overseas visitor primarily in New Zealand for the RWC, and individuals visiting New Zealand primarily for the RWC.

So, basically then, people who report having hooked up with a tourist, tourists hooking up with locals, and folks hooking up at parties are more likely to engage in riskier sexual activities, many of them have had a few drinks, and some of them show up at Sexual Health Clinics. Policy conclusion: crack down on alcohol.

About 133,000 tourists showed up for the RWC; rather a few locals attended RWC events. 151 people showed up at Sexual Health Clinics afterwards. Suppose that ten percent of the tourists here for the RWC had some kind of RWC-related sex with locals, each only having one local partner. That's then about 26,500 people having had RWC-related sex; add to that locals hooking up with each other. I have no clue how close to right those estimates are. But I'd be pretty surprised if that 151 were more than 1% of the total RWC-related hook-ups. And this is the basis for an alcohol crackdown?

Otago remains an interesting place.

Meanwhile, in the asylum

I like to think of New Zealand as being the Outside of the Asylum.

Outside of the Asylum, farmers are free to sell their produce.

Today's news from inside the asylum: hosting a 10 year old's birthday party and selling a bit of farm produce at the event hosted on your farm gets you thousands of dollars in fines.



We don't know how lucky we are....

Small fixes for Christchurch

Without a time machine, we can't go back and revisit Christchurch Council's complete and utter failure after the September 2010 earthquake to ease up on land supply constraints so that the market could have responded after the February quakes by supplying places for people to live. It is completely nuts that Christchurch property values are now above their pre-quake 2007 peak given the massive reduction in the amenity value of living in Christchurch; it reflects that demand wasn't cut by nearly as much as supply and that the combination of regulatory barriers to supply and real time-to-build problems have more people left homeless by the quakes who want houses than there are available houses in Christchurch.

What can we do in the interim, given the very real world constraints of:

• Very limited Council capacity;
• Very real infrastructure constraints that can put limits on extensive brownfield densification;
• Time to build even if we moved right now to whatever the perfect zoning rules might be?

John Fountain, my colleague here at Canterbury, has been trying to help square the circle. How? John has a house in Governor's Bay that's larger than he needs. He wants to build a flat into the house. But it is against Council regulations to put in a flat. Christchurch Council has made it illegal for John, and people like him, to help to make more housing available quickly. Yes I am shouting. More people should be shouting. I'm surprised we haven't seen bricks going through planner windows. I'd certainly never condone such behaviour, but I'd understand.

Here's John, who's more typically Canadian in tone:

There are a few nice features of the new Christchurch City temporary accommodation scheme that permits the construction of an “accommodation unit”. An accommodation unit is  “a structure of no more than 150m² in gross floor area for the purpose of providing temporary residential accommodation. The unit may include facilities normally associated with residential accommodation such as a kitchen, living area, bathroom, toilet and bedrooms. Accommodation unit may also include a campervan or caravan.” There is a fast tracking system for getting pre construction advice and approval in 3 to 5 days  – for free. Of course all building consents need to be in place…but this isn’t necessarily a big hurdle for a well designed and well constructed unit.

The problem is that  “earthquake related” accommodation units are surrounded by a host of ancillary use constraints and regulations that strangle the (apparent)  intentions behind the scheme …: eg whatever faciltiies are constructed  must be temporary,  one-storey,  relocateable,  used only for accommodation by and for   households directly dislocated by the earthquake, and removed when their temporary need has dissipated or when CERA instructions say so or when CERA is disbanded four years away in April 2016.

John then slowly walks through how it's unlikely to be in any property owner's financial interest to build a flat into their existing property if it has to be pulled out four years later.

And, worse, the regulations require that the units accommodate specific persons who are earthquake-displaced. The thing about housing is that even if you accommodate somebody who isn't specifically earthquake-displaced, you're still making room for the displaced person to go where that newly accommodated person otherwise would have been. The first big tick-box on the Council consenting check-list requires you to indicate whether your flat would accommodate somebody whose house was destroyed, who's displaced because of reconstruction, who's displaced because of land remediation, or who's displaced because of risks posed by adjacent structures. You can't use it to accommodate somebody who's moved into town to run a big construction crane even though building something to accommodate that guy frees up a space for an earthquake-affected person elsewhere.

So John reckons he could, for about $110k of his own money, put in a 70 square meter 2-bedroom unit at his place that would rent out for about $300 per week. That makes sense if he can pay off the investment over a term longer than 4 years, and if he doesn't have to pre-specify, before he even builds the freaking thing, who'd live there and guarantee it would be an earthquake-affected person.

It would be very easy for Council to ease up on the current draconian regulations to let people permanently build self-contained flats into their existing properties. These would be dispersed around the city; you wouldn't expect to have large effects on trunk infrastructure. Council wouldn't have to spend anything - just get out of the way. Here's John again:

So…what do we conclude: willing buyers , willing seller but the transactions that would help alleviate accommodation shortages for the next few years are effectively stymied by inadequate regulations . Multiply this 1000 fold and you’ll see why “temporary”  inadequate approaches to zoning regulations – ones that don’t challenge the existing order – are a real bottleneck for dealing with rental accommodation shortages.

The plain fact is that the new  temporary accommodation orders, while well intentioned, simply avoid the underlying regulatory problems that limit the development of small scale private investments that could do plenty to alleviate our city’s accommodation problems. It’s just old wine in a new wineskin  – CERA and the city managers say we’ll facilitate something for you but then enclose it in a shrink wrap agreement that precludes it being used!

The temporary accommodation order itself would have been redundant had the zoning and development regulations been tweaked to permit residential activities to have secondary suites, as in Vancouver and many other Canadian municipalities – something that I am arguing in my other posts..

Here's John on how this kind of solution works in Vancouver. Here's more from John on secondary suites. Here's where John hit the kitchen "stumbling block" for developing a flat on his property.

Is there any plausible negative effect of allowing this kind of subdividing that outweighs the benefits? Why does Christchurch Council make it illegal for my colleague to help ease Christchurch's very real housing shortage? We have an earthquake-Czar who's supposed to be able to ride roughshod over Council stupidity to get things done. This is worth getting done. It would open up a pile of new rental properties that are currently in scarce supply, and it would do it faster than building new.

Every other city in the country should be looking hard at its existing set of regulations and weighing up just how much fragility they've built into their systems in case of sudden and devastating reductions in housing supply.

Update: See also John's post here that points to a City of Vancouver study on secondary suites.