Dangerous drinks

A New Zealand woman died after many years of consuming 4.5-8 litres of Coke per day. I wasn't going to touch this story, but now the woman's family is calling for warning labels on soft drinks and the ever-eager Doug Sellman's using it as a hook for excise taxes on soft drinks.

If you're drinking that much of anything per day, you're likely going to kill yourself. At least the Stuff story, unlike the Radio New Zealand one, is pretty clear on that point.

Drinking up to eight litres of any liquid a day can kill you, regardless of how much sugar or caffeine it contains, a Wellington dietician says.

Foodsavvy's Sarah Elliott said that when "extreme" amounts of fluid were consumed regularly, the body's cells could rupture.

"Ten litres of fluid a day could kill you, no matter what it is."

Specialists recommend that humans do not drink more than four litres of liquid a day.

Water has an LD50 of 90ml/kg, at least in rats. If that LD50 applies to people, drinking 4.5 litres of water in a go would kill half of all people weighing 50 kilograms. I have no clue what this woman weighed, but drinking 8 litres of water would kill half of all people weighing 89 kilos at that LD50, and the Radio NZ piece said she sometimes drank up to 10 litres of Coke in a day.

Here's Sellman:

National Addiction Centre director Doug Sellman says companies are promoting fizzy drinks as harmless.
He says an excise tax needs to be introduced to soft drinks, to warn people that it could have health effects.

Drinking that much water would have health effects. Warning labels there too? How about plain packaging on drinking taps?

GST and the price of meth

New Zealand's drug warriors laud their successes in the war on meth. Evidence of success? The price of a  gram of P is up from $723 last year to $768 this year.

Year on year CPI increase in the September quarter is 4.6%. But a big chunk of that is the GST increase.

If meth had followed the CPI, the price of a gram would have increased to $756, not $768, so maybe enforcement action pushed the price up a bit (although we ought to be pretty sceptical) . But the more interesting question is whether we should have expected price inflation in illegal markets to incorporate the GST increase.

Obviously, drug dealers don't charge GST on meth. But they do pay GST on a pile of their inputs where those inputs are bought in legal markets. And, they don't get to claim that GST back on quarterly returns either. So they'll have had a GST-related increase in their production costs. Since a smaller proportion of their inputs will be GST-affected, the CPI index for illegal sector goods should be lower than for other goods if we don't net out GST effects from either. So the real price increase is likely a bit bigger than a straight CPI-adjustment would have it.

It's worth noting the large disconnect between Key's rhetoric in the press release and the actual report's findings. Here's Key:

The fourth Indicators and Progress report for the Government's Tackling Methamphetamine Action Plan shows government agencies' work is continuing to contain the growth of methamphetamine ('P') supply networks, Prime Minister John Key announced today.

"This initiative has been in place for two-and-a-half years, and we can see that efforts to crack down on those who are importing, manufacturing and selling P and its precursors are working," says Mr Key.

"Six months ago, there were signs that supply chains were being disrupted, due to the efforts both at the border and domestically. We're now able to see that the dedicated resources on the frontline are continuing to squeeze the P trade."

..."The coordinated action against P by a number of government agencies is producing results," says Mr Key. "This report shows that, over time, the work to contain the methamphetamine trade is achieving the right results. All indicators suggest 'containment' and this should be seen as success.

"Any softening in our hard-line stance against P could undo several years of good work. Those who profit from the misery caused by P should realise we are committed to stamping out the harm this drug is causing New Zealand communities."

Here's the report (prior reports). Relevant findings:

• Purity is down a bit, decline "close to being statistically significant".
• What about availability?

  NZ-ADUM data shows a similar trend as IDMS, in that availability has remained stable/easier over the past two years. (p. 10)

  And, 60% of frequent users report no change in difficulty of getting P; rest split evenly between "easier" and "more difficult". (p. 14)
• Convictions for possession/use up from 1327 in October 2010 data to 1557 in October 2011 data; convictions for supply and dealing more than doubled. But still availability has either not changed or has increased.
• Customs is seizing less pseudoephedrine at the border and is instead seizing more P.
• But, the price of a "set" of ContacNT (pseudoephedrine precursor) hasn't changed since September 2009 (p. 13). Recall that the government only announced plans to make pseudoephedrine prescription-only in October 2009. So despite that none of us can get anything that works for a runny nose, the black market price of pseudoephedrine is unchanged. John Key and Peter Dunne have screwed over every New Zealander with a cold for absolutely no benefit.

Keep digging up, guys. You'll get out of that hole someday.

Voters!!! (fist-shaking edition)

It's not surprising, but still depressing, that the kind of people who would vote for Winston Peters are also the kind of people who didn't realize that, if NZ First got 5%, Peters would bring a coterie in with him. Writes talkback radio host Kerry Woodham, who presumably is better placed than most folks to not be surprised about the bottom tail of the voter distribution (HT: @LewStoddart , @SamJBonner):

The post mortem after the election has been interesting on the radio this week.

The number of people who called to say they didn't realise that voting for Winston would mean other people would get in has been teeth-grindingly extraordinary.

"Sooooo," I've been asking, "when you ticked New Zealand First as your party of choice, what did you want to happen?"

"I just wanted Winston to get in to keep the Government honest," they reply.
"And what about the other members of New Zealand First? Did you know who was on the party list?"

"No," they replied as one. "We just thought we'd be getting Winston."

"I was very surprised to see Andrew Williams get in," one exclaimed. "What's he doing there?" she asked.

Here's just one of the winners these folks helped bring to Parliament, courtesy of the Internet WayBack Machine (he's since deleted his homepage).

 PROFILE

Brendan first brought sunshine into New Zealand homes as the 'Weather Man' for the national news on TVNZ's Channel One. Frequently referred to as "Mr Sunshine" or "Mr Personality", Brendan's handsome and cheerful disposition enamored the New Zealand public and set a great many feminine hearts a flutter. Since leaving his day job on national television Brendan has gone on to carve out a successful career as an MC, Public Speaker and Entertainer. He has won the praise of some of NZ's greatest personalities including testimonials from our Olympic Champions, Politicians, A-list NZ corporations and other top class entertainers.

The former male swimsuit model and athlete ‘Brendan who has modeled with Kathy Ireland, Pauline Polinsky and Elle McPherson for 'Sports Illustrated' Magazine, possesses an endearing romantic voice with a casual ‘beach’ charm which is sure to warm hearts. His wonderful onstage charisma will alight fans aglow with comparisons to the ‘big voices’ of Sinatra, Presley and Tom Jones as he brings on the sunshine.

Ah, candidates that set feminine hearts aflutter. Or "a flutter". Either one is just nifty and high praise for our electoral system. I really hope he brings his delightful song stylings to Question Period. I miss hearing John Crosbie sing responses to Shiela Copps in the Canadian Parliament.

Meanwhile, in other belated election campaign fun, I loved the Christchurch Press piece where party leaders were asked about their favourite books and movies. I can't find it now, but a few years back there was a great piece on what people try to signal about themselves when listing their favourite books: learnedness, inquisitiveness, cosmopolitanism, and so on. So a top ten book list was replaced instead with a checklist: "In this spot I will place a book showing I know the canon"; "In this spot I will place a book showing my cultural broad-mindedness" and so on.

So I discounted that the leaders questioned were truthfully revealing anything about their cultural preferences; it was mostly signalling. And, the Press's Charlie Gates seemed to have made similar judgment. I just can't believe that John Key's favourite movie is Johnny English. It can't be. The consequences are too horrifying to contemplate. But, it could be worse; Mitt Romney's favourite book is Battlefield Earth.

Treasury on minimum wages [updated]

Patrick Gower says:

Everyone knows it’s got bloody hard to live on the minimum wage - even John Key admits that. His defence is that a rise from $13 to $15 an hour will cost jobs. Key has used this defence in a televised debate, and he's used it to workers on the shop floor at McDonald's as seen in my story last night. But what Key doesn't want to admit, is that this claim is not the full picture and may just be fear-mongering - a rise may not cost jobs at all. That's what Treasury says in this advice from March 2010 obtained by 3 News under the Official Information Act.

Gower should spend less time reading single analysts' emails and more looking at what Treasury's actually said. He's citing a 2010 email released under the Official Information Act (don't the italics make it all seem secret and hidden and stuff?); here's Treasury in 2010 recommending that Key keep the minimum wage at $12.75 instead of raising it to $13. It's in the regulatory impact statement [ht: Greg Dwyer]. What does Treasury give as reason for recommending keeping the minimum wage at $12.75?

The economic recovery is slow and the labour market remains volatile

Overheating in China and commodity prices in Australia may increase vulnerabilities for New Zealand over the next 12 months

Increasing the minimum wage in this environment could create wage pressures (both directly through increased wage costs and indirectly through pressure on wage relativities) for employers who retained their workforce during the recession, and employers who are expanding their workforce as the economy is recovering

The Department of Labour estimates that keeping the minimum wage at $12.75 may lead to an employment gain of between 1360 and 1960 jobs

Treasury further comments:

As a proportion of the median wage, New Zealand’s minimum wage is the second highest in the OECD (in 2008)

The minimum wage has increased significantly since the late 1990s. In real terms by 63% for adults and 128% for 16 and 17 year olds since 1999 (the latter is largely likely to be due to the abolition of the youth minimum wage in 2008)

Let's recap. Gower paints Treasury as supporting a two dollar increase in the minimum wage when in fact they fought against a twenty-five cent increase in 2010.

I weep for journalism in this country. [Part one of Gower nonsense on minimum wages] Update: Here's Treasury in the Cabinet Papers from the 2010 review.

Treasury has some concerns that increasing the minimum wage may constrain employment growth and impose costs on businesses, particularly given the subdued labour market recovery, minimum wage increases over the last decade, and the level of the minimum wage relative to the average wage. There are also fiscal costs associated with an increase in the minimum wage.

While unemployment is decreasing, New Zealand’s labour market has been volatile in recent quarters. Treasury considers that increasing the minimum wage in the current economic environment would create wage pressures for employers (both directly through increased wage costs and indirectly through pressure on wage relativities) who have retained their workforce during the recession, and limit the opportunity of employers to expand their workforce as the labour market recovers.

There is also a risk that increasing the minimum wage could exacerbate New Zealand’s high youth unemployment. The unemployment rate for 15-19 year olds was 23.3 per cent in the September 2010 quarter. (New Zealand’s youth unemployment rate is four times as high as the adult unemployment rate, and the ratio is high compared to other OECD countries). International evidence indicates that increases in the minimum wage leads to employers substituting non-skilled workers (such as youth) for low or semi skilled workers, as non-skilled workers become relatively more expensive. Youth unemployment is of particular concern because it can have long-term consequences in terms of lower income and poor labour market outcomes. Ministers may wish to ask the Department of Labour to carry out more analysis on the impact of the minimum wage on youth unemployment.

New Zealand’s minimum wage has increased substantially in the last decade, increasing in real terms by 36.6 per cent for adults and 128 per cent for 16 and 17 year olds since 1999 (the latter rise is largely due to the abolition of the youth wage in 2008), compared to a 35 per cent increase in the average wage. New Zealand’s minimum wage is also high compared to other OECD countries. In 2008 New Zealand’s minimum wage as a proportion of gross median wages was the second highest in the OECD (see minimum wage review 2010 Regulatory Impact Statement, page 30, figure 4).

Treasury considers that the total fiscal costs are likely to exceed estimates provided in the paper. Other agencies are likely to be impacted by increases in the minimum wage, and bargaining by state sector employees to retain wage relativities could contribute to the fiscal cost of a minimum wage increase. ...

Odds Gower will have any shame and retract his slur on Treasury?

Canadian idiots - power price edition

Seamus notes the ridiculousness of exempting electricity and home heating from GST. But it's worse than he's letting on.

Why?

Canadian electricity is already massively subsidized.

Take Manitoba. The current residential power rate is $0.062/kWh. They can export that power to the States. Here's what Manitoba Hydro has to say:

We export electricity into a wholesale market, where customers are largely other utilities. The electricity is delivered at a very high voltage and the utility is responsible for any additional costs associated with supplying that energy to their own retail customers.

A comparison can be made with rates paid by large industrial customers here in Manitoba who, like our export customers, take delivery of electricity at a high voltage and then are responsible for any internal distribution costs.

Wholesale electricity sold to U.S. customers at fixed rates is currently priced 50 per cent higher than what large industrial customers in Manitoba pay.

If Manitoba Hydro can get an export price that's fifty percent higher than the domestic price, then the prices in Manitoba are massively subsidized. This isn't price discrimination that leaves Manitoba Hydro better off; this is just political constraint stupidity.

In a sane state of the world, Manitoba Hydro would charge the same price in the States as in Canada, return a larger dividend to the government, and the government would give bigger transfers to low income households that would leave them better off than under the (cheap power plus lower transfers) equilibrium.

Why is power policy stuck on stupid?

1. Equalization payments mean that the Federal government would claw back additional hydroelectric generation revenues, so the provincial government couldn't use that money to compensate Manitoba low income households;
2. Voters don't understand the first and second welfare theorems. I blame this guy.

So instead of charging Manitobans more, Manitoba Hydro has to pay Manitobans to get rid of old fridges - to do the kinds of things that prices would have induced them to do if we'd only let prices work.

What are the other costs? Manitoba and Ontario use a lot of hydroelectric power generation. In Manitoba, it's pretty much all hydro. Hydroelectric power generation is far less damaging in carbon accounts than is coal-fire generation. Every kilowatt hour that Manitoba cuts back to send to the States is a kilowatt hour that wouldn't be generated by American coal. That's in addition to the obvious screwups you get when domestic power use is subsidized.

Manitobans all smug about how their power use is clean and green need to remember that every bit of power they use means another bit of power is produced by coal south of the border. Your smugs aren't free. There's No Such Thing As A Free Smug.

Forgive student loans? [updated]

Justin Wolfers lays out the reasons why forgiving student loans is about the stupidest possible stimulus package. My condensed paraphrase:

• It gives money to relatively rich people or those more likely to become relatively rich
• You get awful bang-for-the-buck in giving money where it won't generate spending. 
• It's a lump-sum transfer to those who already have an education so doesn't affect current decisions to invest in human capital except to the extent folks bet on debt forgiveness happening again
• It induces lobbying for such forgiveness in any downturn
• The tradeoff isn't giving free money to people who have debt versus "the corporations"; it's against the next best alternative - giving money to poor people.

Wolfers' final line? "Conclusion: Worst. Idea. Ever. And I bet that the proponents can't find a single economist* to support this idiotic idea."

I hope then that Green MP Gareth Hughes' tweets (1, 2) on the policy proposal don't constitute endorsement. Gareth, you're a smart guy, your work on copyright has been top notch, and you're great on civil liberties. Why keep pushing for utterly absurd economic policies? Why does pro-environment and pro-helping poor people have to be bundled with utterly absurd economics?

Justin Wolfers is hardly a raving free market screw the poor kinda guy. His objective function - what he wants to achieve in the world - is probably very very close to yours, Gareth. There are better and worse ways of achieving economic objectives. Why do the Greens keep going for the sillier ones? [I blame David Suzuki]

As for New Zealand, I haven't recent data on loan take-up by household decile. A 2005 report has the following:

Students coming out of the highest decile schools also go on to carry the biggest student loan debt.

The 2010 report [HT: Greg Dwyer for both] shows those achieving a Bachelors have higher than median earnings a year after study (and even higher earnings three years out), with higher median earnings for the higher level degrees that also correlate with higher debt levels. And, debt repayment through the income tax system depends on income - at zero percent interest on those loans, the real present value of loan balances is lower for poorer people! Forgiving the debt of student loan holders disproportionately gives free money to high-income surgeons. Is that really what the Greens stand for?

Previously:

• Regressive free tuition 
• Obvious points on student loans
• Interest on student loans

* It would be awfully fun to have an iPredict market on which of the usual suspect economists in New Zealand would come out endorsing "Worst. Idea. Ever." I know where I'd put my money and at what prices. 

A petty aggrevation

I'm starting to get why IT folks hate users.

The road by our house is currently being torn up and rebuilt to lay a new sewer line consequent to the earthquake. Half the street is blocked off with heavy equipment and big holes.

At the traffic circle to turn down my road, there's a big "No Right Turn" sign. As you enter the street, navigating between a whole pile of road cones that limit entry, there are three signs. The first says "Local Resident Access Only". The second says "No Through Road". The third says "Road Closed".

After the turn for a small cul-de-sac that runs off of Estuary Road, there's a more formidable set of barricades with the sign, again "No Exit", and a narrow gap through the cones to allow access for residents. At the end of my block, there's a set of barricades preventing through traffic from continuing onto the next part of Estuary Road.

I watched one car do a U-Turn at that final barricade every 5 minutes on Saturday. On Sunday, I watched the Number 5 Bus do a U-Turn there too. It wasn't gracefully executed.

I could buy some small number of folks making U-turns there. If you didn't know whether, say, 197 Estuary was on the North or South side of Beatty St, you could err. But one every five minutes? And a bus?


It would be mildly fun to have one person sit at the traffic circle and count the proportion of people approaching the circle with GPS devices on the dashboard and compare it with the proportion of folks making U-turns with GPS. Rather a few folks making U-turns seem to have them, but I don't know the relevant base rate.

How do I love the Ministry of Health? Let me count the ways.... [updated]

Ok, not very much.

Readers will recall that I jumped up and down a bit last year about the MoH pulling a fast one in its Nutritional Guidelines for Older People. In short, they cited Rimm and Moats, 2007, as providing evidence that uncontrolled confounds eliminate measured coronary health benefits of moderate alcohol use when in fact Rimm and Moats prove the exact opposite: they show that controlling for those confounds only mildly reduces the J-curve effect.

I emailed MoH, I sent a sharply worded letter to Tony Ryall's office. I didn't hear anything back other than a perfunctory note saying that Ryall had received my letter.

Today I went to check the nutritional guidelines. My old link didn't work for some reason, but I was able to find it here. And lo and behold, they've made a slight change. Did they get rid of the section saying there's no J-Curve? Did they note the new evidence showing the J-Curve to be robust to the prior confounds? Oh, loyal readers, you know our Ministry of Health better than that. They just deleted the reference to Rimm and Moats 2007 from that paragraph while keeping all of the shouting about how there isn't a J-Curve; they instead referenced Middleton Fillmore et al 2007.

Ok. So what does Middleton Fillmore et al 2007 say? They've a metastudy where they claim that high quality studies that separate out abstainers from sick quitters shows no J-curve. But all of their results hinge on the two studies that they deem as being of high quality for coronary heart disease and seven for all-source mortality. By contrast, Di Castelnuovo and Donati's 2006 metastudy compared results in 21 papers results that lumped light and former drinkers with abstainers against those from 27 papers results that specifically excluded light and former drinkers from the reference category. Sorry, but the latter result's just more robust.

Bottom line, Ministry of Health, when they figured out that they were citing a paper that provided contrary results instead of the results they liked, nixed the cite and threw in one that gave them better results, utterly ignoring contrary evidence from more robust studies. Again, the kind of thing that would have me chastising an undergrad or hauling a grad student into the HoD's office for academic dishonesty. But academic dishonesty is the norm at MoH.

Oh, and there's still a reference to Rimm and Moats (2007) in your paper, MoH. It's at page 104:

Methodological issues that suggest the protective effects of alcohol on cardiovascular health may have been overestimated include:

• difficulties categorising amounts and patterns of drinking, and in choosing an appropriate
  reference category to measure drinking against (Emberson and Bennett 2006)
• the inclusion of people reducing or stopping their alcohol intake (often associated with
  ageing or illness) in the ‘abstainer’ category for data analysis, which may have overestimated
  the protective effect of alcohol, as it is not the absence of alcohol that increases the risk of
  cardiovascular disease but ill health ([Middleton] Fillmore et al 2007)
• uncontrolled confounding of healthy lifestyle factors among light to moderate drinkers, such as healthy eating and physical activity (Jackson et al 2005; Rimm and Moats 2007).

MoH pulled the quote I'd highlighted, pulled Rimm and Moats from the bibliography, but forgot to run a full text search to see whether they'd cited Rimm and Moats elsewhere in the paper. They can't even cheat right. [Note, I've saved the PDF of the current version and probably have the old one saved somewhere too. It pays to be a pack-rat when the Ministry of Health runs a memory hole.]

Why oh why can't we get a better Ministry of Health?

Update: I sent the following OIA request and will let folks know what comes of it.

In terms of the Official Information Act, please provide all internal and external memorandums, emails, file notes and written notes regarding the revision of the 2010 Nutritional Guidelines for Older People to delete the reference to Rimm and Moats (2007) from section 4.15 of those guidelines. The reference was present in the Guidelines in August 2010 but has since been replaced with an alternative.