Andrews was prudent to act on valid suspicions

Imre Salusinszky says it as well as anyone in relation to Minister Andrew's handling of the Haneef case:

'On balance, this is one of those no-scandal scandals where the stridency of some commentators only underlines their estrangement from the man and woman on the street.

Unfortunately, this estrangement reveals a pattern we have seen repeatedly since 9/11. It sometimes appears the Western intelligentsia does not have the stomach to go a single round in the fight against terrorism, but would rather we blamed ourselves.

Andrews showed common sense in revoking Haneef's visa, and Opposition Leader Kevin Rudd showed equal common sense in supporting that decision. Both men are in responsible positions and I encourage them to maintain their vigilance over the security of my children, my friends and my fellow Australian.' (my bold)

Update: The Australian reports today that chat room conversations involving Haneef suggested to authorities he may have had prior knowledge of the UK bombings. The scramblebrains on the left owe Minister Kevin Andrews an apology - he'll be waiting. I'll forgive the nitwits who made intemperate and foolish remarks on this blog.

Who will win the next election?

Today's Galaxy Poll shows an improvement in the chances of the Coalition - Labor gets 44% of the primary vote compared to the Coalition's 41%. The two party preferred gives Labor 54% and the Coalition 46%. The Coalition have improved their primary vote 4% since April-May. An interesting analysis of the current situation is here. This confirms that the swing to Labor is 'soft' in the sense of being reversible.

I have patiently followed the polls and the betting markets for months. For a long-time I thought the betting markets were unduely optimistic for the Coalition - today Sportingbet is paying $1-60 for a $1 bet on Labor winning and $2-30 for a bet on the Coalition. As the opinion polls have shown the Coalition recovering the odds offered by the bookies for a Coalition win have narrowed.


It is anyone's election in my view though Labor on current poll trends should win by a landslide.

As numerous commentators have said: The forthcoming election will be an interesting test of pollsters versus betting markets. As a good economist I am supposed to say markets aggregate information efficiently.

Obesity cure

Last word on Haneef?

Md. Haneef has now left Australia. He has been cleared of the charges levelled against him. This does not mean that the charges against him and his possible terrorist links should not have been investigated. On the basis of information available at the time (and in the absence of the ex post wisdom so beloved of the dishonest, ratbag left) he needed to be investigated.

As The Australian remarked yesterday:

‘There is absolutely no doubt that Dr Haneef's connections with alleged terror suspects in Britain had to be investigated. The scale of the task the AFP faced was daunting, sifting through the equivalent of more than 30,000 pages contained in Dr Haneef's laptop, most of it not in English. There is also no doubt that the AFP required the time made available to it under terror legislation to investigate Dr Haneef before laying charges. The AFP also has an important task to fulfill in continuing to investigate Dr Haneef's connections with alleged terrorists in Britain and other people of interest in Australia.’

That Dr Haneef was arrested at Brisbane Airport trying to board a flight on a one-way-ticket to India was also suspicious given its proximity to the attempted bomb attacks. The reports from an Indian newspaper that Haneef was associated with a terrorist training cell also needed study.

Given the evidence available at the time a plausible counterfactual - had he not been arrested - could have been that a suspect, who was suspected of being involved in terrorism, was allowed to flee Australia because suspicions, not backed up by very definite evidence, were not investigated. This would have been unacceptible.

As it turned out two pieces of information given to the AFP and Minister Andrews were false – that the SIM card Haneef had given one of the British terrorists was not in the Scottish bomb attack vehicle and Haneef had not recently lived with the terrorists. An investigation should occur to determine how these errors of information occurred – the source of one error seems to be that the AFP gave the DPP the wrong address for Haneef in Britain. The claim that AFP officers wrote addresses in Haneef’s diary are now revealed to be a lie. Even people who should know better are getting caught up in the frenzy of criticism.

Now charges against Haneef have been dropped although he is still being investigated. The whole process from his arrest to the charges being dropped took only a few weeks and he has even been offered his former job back. He was not been tortured, sent to a Gulag or jailed indefinitely. As Peter Beattie said yesterday - the system works. Haneef himself left Australia with a smile on his face and the stated intention of seeking a new visa and returning to work here. A bitter man whose life has been destroyed as the gutter press claims?

The hysterical response of the left and sections of the Australian media – not the regrettable initial mistakes themselves - damage Australia’s security and its ability to investigate and prosecute terrorism. The main complaint seems to be that:

(i) the charges have now been dropped and
(ii) that an innocent person could have faced charges in a court.

These are toally ridiculous claims since these events are part of the normal processes of law.
The Age’s headline this morning ‘Farewell from the’ land of the fair go’’ hits a new low for what is rapidly becoming the most dishonest and biased newspaper in this country. The accompanying page 2 article by Jason Koutsoukis is just propagandist, anti-Howard politics. It is as disreputable as anything I have seen in this rag. Moreover, it is written up as a straight news story - not described as commentary:

‘THE disgraceful treatment of Mohamed Haneef has all the hallmarks of a typical Howard Government political play'. ('typical'?)

Nasty, divisive, cynical and, of course, no involvement of the Prime Minister himself'. (Good to see a journo who can leave aside his personal moral judgements to give us the facts!)

'Remember children overboard? The whole Commonwealth bureaucracy knew this was nonsense, yet somehow Howard's office did not get the message that no children were ever thrown overboard'. (Judge Jason made this judgement?)

'The $300 million in bribes paid by AWB to Saddam Hussein? Everyone in Canberra seemed to know AWB was up to no good — except Howard'. (Judge Jason again - not the Inquiry which exonerated the Government).

'That his workplace relations laws would make some people worse off? The newly published biography of Howard reveals that this was actually explained to Howard in cabinet — but the Prime Minister cannot remember that'. (He was told something therefore Howard should believe that? Note the sneaky use of the word 'some' - there is 4.5% unemployment and growing real wages.)

'Then there was the terrible mess Howard got himself into in May by trying to deny the existence of a planned climate-change advertising campaign, on the grounds that the ads did not exist until they had got the ministerial tick'. (Judge Jason again)

'With Mohamed Haneef now out of Australia, guilty of nothing more than having a relative who is a suspect in a terrorist case in another country, we have the Prime Minister again saying he knows nothing'. (Judge Jason ignores all early claims believed to be true and acts on the basis of his ex post wisdom).

'When will Howard take responsibility? This time the fall guy is Immigration Minister Kevin Andrews.

The very idea that Andrews would cancel Haneef's visa without deep and protracted consultations with the Prime Minister's office is preposterous. Yet, according to Howard, none of the key decisions were made by him'. (A series of conjectures - no evidence. Not preposterous to me. Andrews is the Minister.)

'Mohamed Haneef's character has been trashed by a Government prepared to do anything to cling onto power'. (Not trashed by the Government but the press did its bit. The press also trashed Australia's reputation and damaged Australia's ability to fight terrorism).

'Yet despite the collapse of the case, no one in the Government has the decency to apologise or even admit that Haneef has been treated unfairly'. (He has not been treated unfairly. Actions were taken given information available. Not the apology nonsense again!)

The Howard Government is beginning to take on all the characteristics of a Government that has lost control. (No Jason you have lost control on this occasion - whatever happened to responsible journalism?)

If John Howard is going to pull off another federal election victory, he must find the discipline that has been the hallmark of his political successes.’ (I think Judge Jason should find a new discipline! Writing fiction or being a left-wing shock jock!).

This is an unsubstantiated stream of allegations that pursues The Age’s ongoing campaign to attack John Howard. It is all about Howard. Almost worse still, Seamus Bradley, in another piece titled ‘Deemed an issue of race and politics’ provides evidence citing exactly the opposite to his title. None of the Indian media make the claims Jason alledges. Never let the facts get in the way of a good headline!

The alternative claim by others on the left that Minister Andrews acted incorrectly under the Migration Act in withdrawing Haneef’s visa is false. He acted without the benefit of ex post wisdom and made a call on the basis of the information available to him. With new information and the decision of the DPP to drop charges against Haneef he may change his view. I don’t know all the facts and neither to the nitwits heaping abuse on Andrews.

The hysterical overreaction to the events surrounding Haneef are being promoted by linking Haneef’s fate with that of the terrorist David Hicks. I hope Haneef sues them – there is no evidence at all that Haneef trained with Al Qaeda anywhere but there is evidence Hicks did. There is no comparability between the cases. The claim of moral equivalency is a disgusting slur on Haneef but it shows where the sympathies of these critics do lie.

Hicks’ father has fostered these distortions:

‘In the wake of Haneef’s release, the father of convicted terrorism supporter David Hicks on Saturday told an anti-war forum in Brisbane that the Indian doctor's case was similar to that of his son's in some ways.’

Innocent people are found innocent and charges are dropped because evidence is found to be flawed. This is a part of the criminal justice system we have. Haneef at this stage looks like he is innocent. The significant damage is not that he was investigated held for a short-period and then released. The problem is the hysterical overreaction to these events. We are becoming a nation of instant know-it-alls, ex post wisdom experts and hysterics.

Our hypersensitivity on these issues is fostered by the idiot left and the sensation-seeking press and promotes anti-western biases. The deeper malaise is that while we react to the slightest infringement on liberties in Australian we are blind to the atrocious treatment of those prosected for crimes in other countries.

In India itself it may have taken months or years for the Haneef case to be resolved. In Iran and Syria there would be no question that a person in Haneef’s position would be tortured and convicted. This is not to say the Australian system is perfect. Wrong information was acted on. But an apparently innocent man was quickly released once imperfections in information were known.

The pet economy & biophilia

I could barely believe parts of this story. According to this week's Business Week Americans spend $41 billion on their pets which is more than the GDP of all but 64 countries. This is mainly spent on 88 million cats and 75 million dogs. Pets increasingly substitute for human companionship – 42% of dogs now sleep on the same bed as their owners.

The issue of whether things are getting out of hand is firmly resolved by the existence of Neuticles, ‘ a patented testicular implant that sells for up to $919 a pair. The idea, says inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness" after neutering, thereby allowing them to retain their natural look and self-esteem. ... "Neutering is creepy. But with Neuticles, it's like nothing has changed." Nothing, except there's a fake body part where a real one used to be.

I don’t have data on the Australian expenditures (I'd be interested if anyone has any!) but notice that nearly a whole isle of most modern supermarkets is taken up with animal feeds and a high proportion of Australian households have that 'wet doggie' odor in their living rooms.

My personal preference is to scrap the high opportunity cost of maintaining enormous cat, dog and caged bird populations and invest the lot in restoring and conserving native biodiversity.

We need non-human life and nature for our survival as a species and to make our lives more pleasant, attractive and interesting. Some have even conjectured that being surrounded by nature improves human genetic fitness.

Edward Wilson advanced the biophilia hypothesis that humans have an ‘innate tendency to focus on life and lifelike processes”. There is seen to be a human dependence or need for nature that extends far beyond needs for material sustenance to encompass, as well, human cravings for aesthetic, intellectual, cognitive and even spiritual meaning and sustenance. Biophilia is seen to be:

• Biologically-based and inherent. Evolution has produced genetically based responses to biological and other environmental phenomena.
• Associated with long-term human competitive advantage, genetic fitness.
• Associated with current possibilities for enhancing personal achievement.
• A self-interested basis for conservation of biodiversity.

These ideas are difficult-to-test and suggest biophilia might be an attempt to ‘promote a romantic idealization of nature’ (Kellert & Wilson (1997)). In this sense biophilia might be a reaction to anxieties generated by technological and political change. As a rationale for conservation and respect for nature, biophilia is essentially utilitarian.

This general demand for nature might in part explain the specific demand for pets - its biophilia accompanied by the need to live in large cities where nature is almost eliminated.

Kellert & Wilson examine theoretical and empirical evidence to support biophilia. They portray biophilia as a set of learning rules that fall along various instinctive spectra from attraction to aversion (biophobia), from awe to indifference but that are driven by millions of years of evolutionary logic. For example, the constant exposure through evolutionary time to the malign influence of snakes results in an aversion to but fascination with snakes. Wilson suggests we do not need to rely on Freudian theory to account for this fascination. Large numbers of such influences combine to help establish human identity and personal fulfillment.

There is some experimental, and other, evidence supporting this view. Some of this evidence relates to the way we learn to be averse or to favor certain natural experiences (animal or landscape). Further evidence includes the large demands for ‘pets’ in industrial societies as discussed.

Habitat selection can be understood as a biophilic response. It answers the question what is a ‘good place’? This can be reflected in landscape aesthetics and experimentally through the effects of natural settings (or paintings of such or aquaria) in reducing stress and even improving health and creativity.

There is even evidence that positive attitudes to nature indicate lack of conduct disorders in children. Certainly children seem to learn much about the world through species recognition. Thus the principal nouns of interest to small children are body parts and animals.

Adults see animals as important symbols: the honeybee (‘wisdom and sensitivity’), the pig (‘lustful and lazy’) and the bat (‘denizens of the underworld’). This is important because information is processed by means of symbols.

Evidence on the behaviour of hunters is also relevant since, as anthropologists point out, for most of human history humans have been hunter gathers. This evidence suggests both intense knowledge and respect for nature as a whole coupled with a (sometimes) savage utilitarianism.

All of these types of values might need to be accounted for in valuing the potential destruction of nature. There seems however to be no evidence that responding positively to nature has a partly genetic basis.

I get positive benefits from enjoying living in natural surroundings and observing nature. The benefits are amplified if occasionally I can do this alone - I find my own company wonderful at times - where I can, without inhibition, allow my curiosity to roam. I don’t want or need dogs, cats or caged birds to be my 'friends' or to get a sense of nature and/or a biophilia blast.

Policies for reducing the costs of cigarette smoking in Australia

I wrote this paper with Louise Collis. Comments are very welcome.

Abstract: Policies for regulating tobacco smoking in Australia are examined. Cigarette management policies need to account for the addictive nature of nicotine, information failures and the existence of externalities and internalities. The external costs of smoking are low relative to internalised private costs. In so far as externalities do arise they can be addressed by taxes and by direct controls on smoking. If internalised health costs are targeted then taxes and restrictions can be usefully assessed in terms of implied health outcomes. Substitutions toward ‘chop chop’ and compensatory behaviour by smokers restrict the usefulness of taxes while the existence of NRTs and smokeless tobacco products enhance the case for hefty taxes on smoked tobacco. Adverse effects on low income consumers from high taxes can be offset by income transfers from high income consumers. Smoking behaviour among high income consumers can be addressed using non-price deterrence, such as bans. Policy development is complicated by the existence of distinct groups of users who react differently to incentives.

1. Introduction

Most governments intervene to reduce the consumption of tobacco. Australia, along with nearly 150 other countries, has ratified the World Health Organization Framework Convention on Tobacco Control (WHO, 2003), binding it to provide warning labels on cigarette packages, restrictions on where tobacco can be consumed, advertising bans and disincentive taxes. With an estimated 19,019 deaths in 1998 attributable to smoking in Australia (Ridolfo and Stevensen, 2001), there is little argument against the need for some intervention, but some disagreement as to the level and form.

In Australia, the national policy setting framework is set out as the National Tobacco Strategy (NTS) (Ministerial Council, 2004). Its central goals are to improve tobacco-related health outcomes and to reduce the social costs of tobacco use. The aim is not only to reduce the externalities associated with smoking, such as public health costs and passive smoking exposure, but also the internalities – the costs that smokers may not take into account when deciding to consume tobacco. The latter include increased private health costs, reduced paid and unpaid work potential, disability, and early death. In fact the NTS seeks a reduction in gross health costs, regardless of who bears the burden of these costs. The rationale given for the focus on gross health costs rather than external costs alone is that smokers can be irrational and suffer from internalities.

This paper also pursues this objective as well as focusing on external cost. This recognises the fact that reducing smoking is a key social objective, so that an economic question arises as to how to meet this objective effectively and at low cost.

One issue when developing policy is that different groups may react differently. In 2004, there were about 2.8 million Australians who smoke at least once a day and half a million who smoke less than daily (AIHW, 2005). Those who smoke less than five cigarettes a day, known as ‘chippers’, are unlikely to be addicted to nicotine (Shiffman et al, 1995). Studies suggest that, of all smokers, about 7 per cent are chippers, and a further 16 per cent are casual smokers (Zhu et al, 2003), equating to about 650,000 smokers who may be more responsive to smoking disincentives. Over half of the Australian population aged 14 and over have never smoked, while just over a quarter have successfully quit. This group may be considered to be potential users.

In most developed countries the incidence of smoking has fallen dramatically since the 1950s when the connections between smoking tobacco and lung cancer were publicly articulated. In Australia smoking of tobacco products peaked in the 1950s when about 70 per cent of males and 30 per cent of females smoked. Among adult males smoking prevalence dropped from 45 per cent in 1974 to around 18.6 per cent in 2004. Among females it fell from 30 per cent to 16.3 per cent (AIHW, 2006). Before these gains can be celebrated, it should be remembered that globally tobacco use is estimated to kill about 5 million people annually, increasing to 10 million by 2030 (Jha et al, 2006).


Smoking has significant effects on length of life. Doll et al (2004), for example, examine the smoking behaviour of 34,439 male British doctors over a 50-year period and find that long-term smokers died 10 years younger than non-smokers. For men born around 1920, Doll et al found that prolonged smoking from early adult life tripled mortality to 43 per cent among smokers compared to 15 per cent among non-smokers between ages 35-69. Moreover, cessation at age 50 halved the mortality hazard and cessation at age 30 avoided most of it, confirming the huge potential public health gains from quitting.

Smoking is a major risk factor contributing to disease. Mathers et al (2000) evaluate such factors as obesity, unsafe sex, alcohol consumption and smoking for the effect they have on disease and injury as measured in disability-adjusted life years. Tobacco is responsible for nearly 10 per cent of the burden and more than any other identified, avoidable factor.

Part of these health costs is born privately: in Australia in 1998-99 treatment costs borne by individuals were $145 million. Net health care costs borne by government (costs that net out the saving that arise because smokers die early) were $880 million in 1998-99 or about $1054 million in 2004-05 dollars (Collins and Lapsley, 2002). Public health sector costs are therefore much smaller than the tax benefits accruing to the community from cigarette taxes which in 2005-06 amounted to $5.3 billion (Commonwealth of Australia, 2007). This does not, however, imply that taxes are inefficiently high for two reasons. First, efficient externality taxes equate the cost of a good with the social marginal costs. If these social marginal costs are strongly increasing – so damages associated with smoking increase more than proportionately with consumption – then tax revenues collected will exceed external costs. Second, for public financial reasons, taxes on goods such as cigarettes, with relatively inelastic demands, will be large because this helps to limit the ‘excess burden’ of the total tax take.

The NTS claim that one of the major market failures associated with smoking is that smoking is not a free and informed lifestyle choice. First, the health risks of smoking are under-appreciated by smokers as is the reality of nicotine addiction. Moreover, smokers under appreciate the connections between smoking and the incidence of specific diseases. Second, most people start smoking and become dependent on nicotine while young and presumably immature. Further, decisions relating to addictive goods are not easily reversible.

The remainder of this paper is structured as follows. Section 2 considers the addictive nature of nicotine. The question of whether smokers make fully informed choices is further explored in section 3. Sections 4, 5, 6 and 7 look at specific policies, some of which are adopted in Australia. Section 8 concludes.

2. Issues affecting policy development

The addictive nature of cigarettes calls for a distinctive public policy approach compared to non-addictive goods which may nevertheless have the potential for poor information, or yield negative externalities, such as polluting fuels. The nicotine delivered by cigarettes is addictive. This distorts thinking processes and leads to uninformed decisions that may persist. Most people start smoking and become dependent on nicotine while they are young. The addictive agent is much less harmful to health than other components of smoking, such as carcinogenic, tobacco-specific nitrosamines. However when cigarettes are smoked these are inevitably consumed jointly with the nicotine and so cause health damages.

Addicted smokers smoke to satisfy a craving for nicotine. Typically, that craving is met by raising the level of nicotine in the blood to a certain level. This is achieved by consuming enough tobacco products to yield this desired level. This means that ‘cutting back’ on cigarette consumption will typically not be an option for a smoker who wishes to continue to smoke. Thus, the response of most smokers to low-tar cigarettes is to smoke more cigarettes, smoke more of each cigarette, to inhale more deeply or generally to change smoking behaviour to maintain the nicotine levels in the blood. For example, breathing holes in ‘light’ cigarette filters, which mix air with smoke before inhalation, are countered by covering holes with fingers or lips to increase nicotine intake. Any measure to reduce the intake of tar, which simultaneously reduces nicotine intake, is therefore likely to fail. An addicted cigarette consumer compensates for any move to reduce nicotine consumption by changing their smoking behaviour.

For those smokers who find the addiction insurmountable, alternate methods of delivering nicotine to the brain exist. Pharmaceutical nicotine in the form of patches, gum or inhalers, delivers nicotine without the carcinogens and toxins present in tobacco. These can be used to replace cigarettes completely in the case of those who quit, but they can also be used by smokers to reduce the amount smoked. Four studies reported in ASH (2007) of smokers who were interested in cutting down the amount smoked but were not yet ready to quit, found that one in twelve had quit within a year. These studies also showed that in double-blind placebo trials, smokers given NRT were more than twice as likely to sustain a reduced tobacco intake.

The nicotine delivered may nevertheless have some adverse consequences. While having far fewer negative health consequences than smoking, nicotine may be a trigger for cardiac events, may affect a foetus, may be passed through breast-milk, and may reinforce a nicotine addiction in adolescents. Nicotine increases pulse-rate and blood pressure, and slows the release of insulin. The health effects could perhaps be compared to caffeine. Nicotine is not, however, associated with carcinogens, and may be beneficial in some cases, for example in the treatment of Parkinson's disease and Alzheimer's disease (Birtwistle and Hall, 1996).

Smokeless tobacco products such as chewing tobacco and oral snuff have been banned in Australia since June 1991, on the basis that they are ‘known to cause cancer of the mouth’. Nasal snuff, that is now consumed in negligible quantities, is not covered by this same legislation, but is controlled federally in a similar fashion to smoked products, and is banned in five states and the ACT.

A 1988 review by the Trade Practices Commission (TPC) found an association between oral snuff and cancer, but did not support a ban on chewing tobacco or nasal snuff. Despite this, the ban introduced covered chewing tobacco and oral snuff on the basis that they may be unsafe (Quit Victoria, 1995). It was acknowledged that this treatment was different from smoking tobacco and alcohol which were known to be unsafe, but this was not seen to be relevant to the decision. In addition to the health consequences of nicotine, chewing tobacco is associated with mouth cancer, due to the presence of nitrosamines in the prepared tobacco. While smokeless tobacco is not harmless, there is much evidence that it is less harmful than smoked tobacco of the order of 1/1000 to 1/10 of the risk (RCPL, 2002). Phillips et al (2005) show that despite evidence that smokeless tobacco is safer than smoked tobacco, information easily available continues to promote the message that smokeless tobacco is no safer.

A distinction that may be important is between harm minimisation and harm reduction. Undoubtedly, quitting tobacco products altogether minimises harm, but where this is not an option, at least in the short term, chewing tobacco may be a reduced harm option.

It could be theorised that promotion of a good that reduces the cost of smoking may increase the demand for cigarettes. By reducing the cost of quitting, NRTs could induce a moral hazard whereby the probability of potential smokers to consume smoked tobacco is increased. Saffer et al (2007) test this thesis on youth smoking, and find that NRT advertising has no affect on whether a person smokes, but may increase the amount smoked for those who do. They find that a 10 percent increase in NRT advertising is associated with an increase in average cigarettes smoked per day from 5.77 to 5.82. Further, a ban on NRT advertising would have the same effect on amount smoked as a 10 percent increase in prices. This suggests a caution to any aggressive promotion of substitutes.

Most smokers commence smoking when they are young. The NTS (p. 3) suggest that more than 90 per cent of those who currently smoke in Australia begin as teenagers. This is significant because, first, many of those using will become addicted to nicotine and will continue smoking throughout their adult life. Second, there is strong evidence nicotine has particular neurotoxicity costs for young people defined as those aged less than 25 years (Jacobson et al, 2005) even though it is much less toxic for those who are older.

Finally, and more significantly, there is strong evidence of enhanced impulsiveness, and hence of higher rates of time preference at very young ages (Mischel et al, 1992) and initiation of smoking during adolescence is related to impulsiveness (Baumeister et al., 1994, p. 198-199). This suggests use at younger ages is less guided by rational foresight than other factors and strains the case for ‘informed choice’ arguments. The main policy implication of the idea that rates of time preference rates fall during adolescence is to focus the direction rather than level of anti-smoking effort. Strict bans on selling cigarettes to the young, age limits on the right to smoke and advertising campaigns directed at discouraging initiation of smoking are sensible options.

3. Information and internalities

The claim by the NTS that health risks are underappreciated has been challenged by Viscusi (2002) and others, who argue that the risks of smoking are widely appreciated by most people partly because of publicly-funded, anti-smoking campaigns and press coverage of smoking risks. Indeed, this was the basis for the failure of individual plaintiff lawsuits in the United States up until 1990 – jurors consistently concluded that the risks of smoking were well known and voluntarily incurred. Thus non-smokers are not privy to ‘secret information’ regarding the hazards of smoking. Viscusi (2002, Chapter 7) argues that US citizens fully understand the risks of smoking with respect to lung cancer, total smoking mortality and life expectancy loss. With respect to lung cancer risks, which Viscusi estimates to be 0.06-0.13, he found that, in 1998, the overall population forecast this risk at 0.48 while smokers predicted 0.42. Thus smokers overstated the risks of contracting lung cancer by a factor of between 3.2-7 times. Viscusi found this was so both for highly educated and un-educated people. Moreover, people overestimated the effects of smoking in reducing life span confirming that they overstate smoking hazards. Viscusi also provides evidence suggesting that people fully understand the addictive implications of smoking. Most people know that it is difficult to quit smoking once it is initiated.

However people do not identify all of the specific risks of smoking. For example women seem to be unaware that they are particularly susceptible to the health costs generated by smoking. Zang et al (1997) shows that, accounting for differences in body weight, women have higher lung cancer risks. In addition, smoking reduces female fertility. Van Voorhis et al, 1996) shows substantial dose-related ovarian disfunction occurs with smoking. Women are also particularly susceptible to becoming addicted to nicotine. DiFranza et al, (2002) shows that smoking periods prior to initial addiction of 12-13 year olds were 21 days for girls and 183 days for boys. It is also true that passive smoking has severe health costs for children: thus ABS (2006) argue that breathing in of tobacco smoke by non-smokers can lead to harmful health effects in unborn children, and middle ear infections, bronchitis, pneumonia, asthma and other chest conditions in children. It is also linked to sudden infant death syndrome (SIDS). In adults, passive smoking increases the risks of heart disease, lung cancer and other chronic lung diseases.

To some extent these hazards will be emphasised by fostering perceptions that smoking is a generally hazardous activity even if specific health problems are not spelt out. But to the extent that these specific problems are individually significant and under-appreciated the implication is that smoking warnings should target not only general risks of smoking, which are already internalised, but instead be specifically targeted to those particular smoking-related health issues that are underappreciated.

In addition there are specific groups in the community who do not appreciate the risks of smoking partly because they are isolated from the impact of sustained health warning messages. A particular group of concern are Australian aboriginals who have high rates of smoking and widespread under-appreciation of attendant health risks. About 51 per cent of adult indigenous Australians smoke compared to 17 per cent in the non-indigenous population (ABS, 2006). Higher rates of smoking are associated with lower socio-economic status, unemployment and early school leaving which are characteristics of many indigenous populations. Dispossession and dislocation contribute to the low self-esteem which is also associated with smoking. Members of the ‘stolen generations’ are also more likely to smoke than other indigenous Australians. A 1994 survey showed that one third of indigenous Australians erroneously thought it was safe to smoke up to one pack of cigarettes a day (ABS, 1996). Smoking warnings should be adapted to target aboriginals.

Even if individuals on average internalise health risks, there can be a case for specific policies that target specific health problems linked to smoking and to target particular groups who are not receiving the required message.

In addition, there are important aspects of smoking about which individuals seem poorly informed. Cummings et al (2004) argue that smokers may be well-informed about the size of health risks but still not have good information on reducing these risks. Knowledgeable smokers might be prepared to experience a certain level of health risk but still seek ways of reducing that risk. For example, 58 per cent of smokers believe that smoking is made less hazardous by switching to low tar or filtered cigarettes despite decades of research showing the converse (Hastrup et al, 2001).

More generally Cummings et al surveyed 49,593 households of occupants aged 18+ to determine generally what is known about reducing smoking risks. They found:

· 94 per cent of respondents believed they were well-informed of the health consequences of smoking even though their understanding was poor.
· 39 per cent misunderstood or didn’t know the health consequences of smoking, more than half had misleading information on the content of cigarette smoke, the safety of nicotine and the role of additives.
· 65 per cent had incorrect information on the safety of low tar and filtered cigarettes believing they lowered health risks when they do not.
· 56 per cent had incorrect information on the safety implications of nicotine medications believing they were more harmful than they are.
· Most smokers misunderstood the addiction properties of nicotine medication which is less likely to cause addiction and heart attacks than smoking cigarettes. This misunderstanding limits the potential for consumers to reduce their health risks by switching from harmful cigarettes to safer NRT and smokeless tobacco products.

Cummings et al also provide evidence for optimism biases. While smokers estimate community risks adequately they underestimate the risks posed to their own health from smoking. This misperception is partly due to their mistaken belief that they will be able to stop smoking before health problems eventuate.

It is therefore incorrect to claim that smokers have accurate information about reducing the risks of smoking creating a case for public intervention to refine perceptions. A major misperception is the widespread belief that low tar and filtered cigarettes reduce the risks from cigarette smoking but that medically supplied nicotine and smokeless tobacco such as snuff do not. Each of these views is fallacious. Nor is it true that heavy smokers who cut back their smoking, even by 50 per cent, reduce their health costs. Godtfredsen et al (2002) show that over a 16 year period, heavy smokers who reduce their smoking by 50 per cent do not reduce their mortality risk while those who quit to reduce their risk.

Compensatory smoking behaviour explains why there is no reduction in risk associated with reduced smoking. The policy implication is that quitting cigarette smoking completely should be the major policy objective.

4. Policies to counter externalities

The World Bank regards tobacco taxes as the single most important step governments can take to reduce smoking among both young people and adults. The adult demand elasticity is ‑0.4 and for children ‑1.6. Australian evidence supporting this general conclusion is in Bardsley and Olekalns (1999). They estimate short-run price elasticities of -0.2 to -1.5, and suggest that the impact of price is greater than that of anti-smoking messages. Policies that discourage use by increasing the price of tobacco products are therefore fundamental to reducing smoking and thereby to reducing the costs of smoking. These policies are most effective as a tool in discouraging young smokers, chippers and those on low incomes since it is such people who will have most elastic demands.

Surveys which measure preferences for anti-smoking policies show that even smokers themselves support increases in taxes (Gruber and Mullainathan, 2002). This suggests that price increases driven by tax increases have low welfare costs. In 2004, over 65 per cent of Australian ex-smokers supported policies to increase taxes on cigarettes as a measure to discourage use (AIHW, 2005). Moreover, Nakajima (2007) found that peer effects, whereby the smoking choices of friends influences a potential smoker’s choices, strengthens the effect of taxes. If these externalities are taken into account, the effect of taxes may be 50 per cent greater than that measured directly.

However, tax based policies have some adverse equity implications which the NTS recognise. Not only are the poorest quintile most likely to smoke, they also smoke more cigarettes per smoker (AIHW, 2005) and cigarette consumption is a large part of their disposable income. The 2003-04 Household Expenditure Survey found that the while the highest income quintile spend 0.8 per cent of total income on tobacco, the lowest income quintile spends 1.8 per cent. To some extent however these regressive effects are offset by the fact that price elasticities will be higher among those with low incomes. In particular, one response to higher prices among the poor will be increased quit rates and lower levels of consumption. Thus the financial burden of the tax will tend to be borne mainly by those on higher incomes.

Currently taxes are applied on a per stick basis. An efficient tax would be set at the amount of externality imposed, implying that cigarettes with higher levels of harm should be taxed at a higher level. This would also provide incentives for producers to reduce known harmful agents.

Complications of further tax increases include greater use of illegally supplied tobacco (‘chop chop’). The existence of illicit supplies is a serious constraint: the 2004 National Drug Strategy Household Survey reports that 38 per cent of Australians smokers aged 14 and older are aware of unbranded loose tobacco, and of those, nearly 23 per cent have smoked it. The recent acceptance of offers to domestic growers to exit the market will make policing of illicit supplies easier and hence should reduce the supply of unbranded illegal tobacco. In the future tobacco may only be grown in Australia if binding contracts to export it exist.

Smoking bans are a further way of countering externalities by reducing the opportunity for passive smoking externalities to be incurred. Many countries impose restrictions on who can sell and buy tobacco, and where it can be consumed. Smoke-free legislation was introduced in the Republic of Ireland from 24 March 2004, and by 2007 the remainder of the United Kingdom, along with most states and territories of Australia and the United States of America, and provinces of Canada have laws against smoking in workplaces and other public places. In Australia, smoking restrictions in public places such as pubs are regulated by states and territories, with Queensland having the strictest laws, and Northern Territory as the only state/territory with no restrictions in force or due to come in force.

It has been argued that bans on smoking in public places may increase exposure to environmental smoke by forcing smokers to consume at home (Adda and Cornaglia, 2006). However, in Ireland, where smoking has been banned in all workplaces including pubs, surveys show that the introduction of the ban was accompanied by an increase in the number of smoke-free households. Borland et al (2006) similarly found a strong correlation between jurisdictions with smoking bans and lower tolerance for smoking in the home.

The NTS, in its discussion of bans, states that the policy intent is to reduce exposure to passive smoking. While important, this ignores additional positive benefits of bans to smokers. A US survey found that workplace smoking restrictions reduced the amount smoked by a given smoker by ten per cent, and reduced the probability of a worker being a smoker (after controlling for the likelihood that a smoker would choose to join a workplace with a ban) by five percentage points (Evans et al, 1999). More recently, a study of smokers in Greece, where smoking rates rose over the 1990s in contrast to most developed countries, shows that smokers are much more responsive to workplace bans than to price increases (Raptou et al, 2005).

5. Policies to counter information failure

To the extent that there exists an information failure as described in section 3, provision of accurate information about risks and ways of reducing risks is an effective tool. Advertising bans and restrictions on smoking scenes in movies are also useful in reducing positive images of smoking. Labels which misleadingly suggest that cigarettes are safer, such as ‘mild’ and ‘low tar’ are banned.

Smokers should be provided not only with information about the dangers of smoking, but also with accurate advice on how to reduce risk. Cutting down the number of cigarettes smoked or switching to low tar cigarettes can do more harm as smoke is taken deeper into the lungs in an effort to satisfy the nicotine requirement of the addiction.

In Australia, cigarette packs must contain text and graphic health warnings. They may not contain any descriptors such as ‘light’ or ‘mild’. An equivalent to the comprehensive list of ingredients or nutritional information which is required on food products is not only not required, but is not allowed. One difficulty with providing such information is that the amount of toxins consumed depends heavily on the smoking method. A smoker may change the way they smoke, meaning that a cigarette that contains less of a toxin may deliver more to the smoker if other aspects of the cigarette cause it to be smoked differently. Low values of toxins may suggest a cigarette is less harmful even though the compensatory smoking method may make it more harmful. The drawback of not providing any information is that tobacco manufacturers have no incentive to remove or avoid use of toxins.

Federal and state governments support anti-smoking and quit information campaigns, both directly, and through support of organisations such as QuitSA and Quit Victoria. Information is provided through mass media advertising, schools, and printed material. Fully subsidised advice and help can be sought online or by phone. The thrust of advertising is general, but campaigns are also directed at pregnant women, women in general and youth.

6. Policies to promote substitutes

NRTs, and smokeless tobacco are, as discussed in Section 2, lower risk substitutes to cigarettes although they are not completely riskless. NRTs are available over-the-counter but they are not subsidised. It has been shown that NRTs are a cost-effective way to reduce smoking (Wasley et al, 1997); if social costs are associated with smoking cigarettes, an argument can be made for a subsidy. However, in Australia, smokeless tobacco is not only not promoted, but actively discouraged with bans and production and import restrictions. The NTS, in its discussion of smokeless tobacco, concedes that it may be less harmful than smoked tobacco, but is concerned that it may hinder quitting, and form a ‘gateway to tobacco smoking.’

McNeill et al (2001) argue for a complete liberalisation of the market for NRT on the grounds that the alternative to NRT use is even more destructive tobacco consumption. Criticising the risks of consuming NRT alone is not sensible and reflects risk-aversion from the viewpoint that NRT should be subject to pharmaceutical regulation. One suggested approach is to provide NRT to overcome nicotine withdrawal symptoms and to overcome the behavioural side of nicotine dependence and then to break the dependence by stopping use of NRT. According to McNeil et al, minors, pregnant smokers and even smokers with cardiovascular disease should all be allowed to use NRT if the alternative is to continue cigarette smoking. Moreover, NRT at moderately high doses should be made available for long-term use and should generally be made as widely available as cigarettes. Reducing regulatory hurdles that limit marketing of NRT products would provide incentives for firms to produce and develop such products.

While smokeless tobacco and NRT are a more healthy way for a nicotine addict to access their nicotine, a difficulty in promoting such products is that they may reduce disincentives to smoke. Thus if the constraints on initiating a smoking habit are the anticipated long-term health costs that stem from an anticipated addiction to nicotine that is costly to reverse, any substance, such as NRT, which reduces the cost of quitting, might increase the incentive to initiate use, as investigated by Saffer et al (2007) for youth.

Finally, the drug bupropion, marketed in Australia as Zyban, is not a substitute for nicotine, but aids in smoking cessation. It is available on prescription and is subsidised under the Pharmaceutical Benefits Scheme, receiving a government subsidy of over 80 per cent.

7. Other policies to reduce harm

Cigarettes contain a number of known carcinogens which occur naturally during the curing process, and which could be removed. Also, regulating the use of chemicals, pesticides and fertilizers in the production of cigarettes could reduce known toxins. These moves would not make cigarettes safe, but safer. As with the promotion of NRTs, any move to reduce the private costs of smoking may increase use, and this must be taken into account when estimating the benefits of the reform.

Cigarettes are known to cause a number of fires every year. Collins and Lapsley (2002) estimates that cigarette-induced fires cause $52.1 million of tangible costs and a further $28.5 million of costs due loss of life. Reduced-ignition propensity (RIP) cigarettes which do not continue to burn when not drawn have been developed, and there are calls to ban in Australia cigarettes which do not incorporate these features (Chapman and Balmain, 2004).

Sale of cigarettes is restricted to licensed outlets in some states, while in Victoria and New South Wales, for example, so licence is needed. There are limits on the size of advertising, the number of packs that can be displayed and a ban on sale or discounting advertising at place of sale, although these may vary from state to state. Sale to minors (age under 18) is prohibited. Cigarettes cannot be sold singly: the minimum pack size is 20 cigarettes. This discourages non-smokers from experimenting with cigarettes, and in particular makes it more difficult for children to buy cigarettes as they typically have less disposable income.

There have been calls for sale of tobacco to be limited to pharmacies. The NTS points out that cigarettes have a higher retail profile than milk or bread, being available in more outlets. Allowing tobacco to be sold together with everyday items gives the impression that it is a similar product, unlike codeine, for example, which may only be sold by a pharmacist.

Research is being conducted into vaccines which prevent nicotine from reaching the brain. Once the nicotine reward mechanism is broken, the addictiveness of cigarettes is removed. Researchers point out that these vaccines, if effective, may help recent quitters from relapsing, but are not designed as a long-term preventative (Hall, 2005).

For addicted smokers, the aim may be to deliver the necessary nicotine with the least amount of tar, carcinogens and carbon monoxide. In theory this could be achieved with artificially heightened nicotine levels in a low tar cigarette – a mandated minimum level of nicotine. An important drawback is that the cigarettes would be available to potential smokers or non-addicted smokers. Given that an addiction is formed when a stock of nicotine is consumed within a certain time, high nicotine cigarettes would make it easier and quicker for a non-addict to become addicted. This would suggest a recommendation for a maximum level of nicotine.

Penalties are not discussed in the NTS, possibly because most penalties are set by states, although this is also true of bans. Penalties reinforce regulation, and in the absence of appropriate penalties, regulation is not binding. The penalty for manufacturing, selling or supplying chewing tobacco or snuff is 100 penalty units ($10,743) in Victoria (Tobacco Act 1987 s.15), and 140 penalty units ($10,500) in Queensland (Tobacco and Other Smoking Products Act 1998 s.26ZR). This suggests that legislators believe that the harm from chewing tobacco is high. In the state of Victoria, the penalty for selling to a minor is from 2 penalty units (~$200), up to a maximum of 50 (~$5,000). Penalties in Queensland are much higher: $10,500 fine for a 1st offence, and up to $31,500 for a 3rd or subsequent offence, plus revocation of seller licence for up to three years (Tobacco and Other Smoking Products Act 1998 s.10), but this was increased from a fine of $75 in 2005.

A 2002 survey of under-age smokers in NSW found that 22 per cent bought their last cigarette from a retail outlet (NSW DoH, 2004). Similarly, a 2005 survey of Victorian youth found that 23 per cent purchased their last cigarette, and even in the 12-15 age group, 17 per cent of recent smokers indicated that they had purchased cigarettes from retail outlets (Cancer Council Victoria, 2006). This suggests that expected penalties are not providing adequate incentives for licensed retailers to diligently check the age of purchasers.

8. Conclusions

Developing policy in such a complex environment involves trade-offs. While policies have been very effective in reducing the overall numbers of people smoking, there are still huge potential costs and large numbers of new smokers. And while policies are effective for those who are able to quit, for those who find it difficult, the range of alternatives is limited by bans on many nicotine products.

Policy makers are wary of any apparent quick-fixes, and with reason. The low tar campaign which purported to offer a safer cigarette and which was supported by policy makers was shown in many cases to do more harm than traditional cigarettes. Proponents of high nicotine cigarettes (which give the nicotine hit with less of the carcinogenic tar) often ignore the fact that potential smokers are more likely to become addicted if nicotine is more accessible.

Taxes are a simple way to discourage use, but they are regressive, as lower socio-economic groups smoke in greater numbers. Taxes collected more than make up for externalities imposed, but information failures and the addictive nature of nicotine mean that the cost of internalities may be very large.

While the greater aim is to reduce total costs due to smoking, to the extent that private costs are reduced through safer cigarettes or easier quitting, use may increase. Whether this results in a reduction in harm is a matter of measurement.

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Bracks quits

I empathised with Premier Steve Bracks the other day after his son was arrested for crashing his car when he had been drink driving. Bracks was publicly scathing in his criticism of his son but you could see the deep sadness.

He said he 'felt hopeless and useless, and you can't help feeling a bit of a failure in some ways as a parent.' Now Bracks has quit politics and cited this incident as one of the reasons.

All parents fail in one respect or another and politicians have demanding lives. Bracks has worked out the tradeoffs and made a personal choice that I respect. I wish him the best.

Happy birthday John!

Prime Minister John Winston Howard turns 68 today. He has been Prime Minister for 11 years and involved in Liberal Party politics for 50 years.

Howard looks fit and intellectually at his full strength - more like someone likely to fight on for a fifth term than someone about to retire as an aged pensioner.

If JWH stays on and completes another term he would be 72 - the age that Robert Gordon Menzies retired as PM.

I am sure everyone in the blogosophere wishes John a happy birthday. But lest anyone should inadvertently forget: Happy birthday John from the blogosphere!

Repositioning La Trobe University

The Green Paper Repositioning La Trobe University written by new Vice-Chancellor, Professor Paul Johnson, was released yesterday.

It is discussed in this morning’s Age and Australian newspapers. The Age continues its campaign to denigrate LTU with a totally negative report – it never misses an opportunity to do this. The Australian’s discussion is more positive and helpful.

The main ideas of the Green Paper - as discussed in the press - are to consolidate courses and to cut teaching time by 25% by cutting out small enrolment units. Also teaching only positions would be available thus releasing staff to do more research. Moves to promote more graduate level programs across the whole university will be accelerated.

It would be inappropriate for me to comment on the content of the VC’s report in a public forum – it’s only a discussion paper at this stage anyway - but I am impressed with the way he is addressing himself to the issues faced. He is promoting discussion throughout the university and even talks about starting an in campus blog.

The university faces some tough choices but having a VC who is intelligent and active provides a sense of renewed optimism.

Should we change our government?

Even as a partisan in this debate I still feel it is worthwhile to ask a basic question. Would we be better-off with an experienced Howard Government or with a broadly similar, though less experienced, Rudd Labor Government? The arguments I have seen favouring Labor often seem negative – reasons for not voting for the Coalition rather than a strong preference for Rudd’s team.

Rudd is certainly trying hard not to offend and is offering a ‘small targets’ policy but why then throw out an experienced party. Will Labor provide better economic management? What will it do better?

Some of the criticisms of the Coalition are that it is a slow on implementing a reform agenda and that its age has made it run out of ideas. Despite WorkChoices I think there might be some point to this though it would be surprising to me if the mass of Australians saw the lack of a reform agenda as a reason to vote against the coalition.

By the way Labor’s last spell in office (13 years) was longer than John Howard’s current term. The age of John Howard himself (68 in two days) seems an irrelevancy.

There are also specific issues such as Australia’s involvement in the unpopular involvement in the war in Iraq and the claimed untrustworthiness of the Government (Tampa, AWB etc.). This issues are often discussed by the left but I am unsure if it is accurate or if it reflects general community attitudes. Would the electorate appreciate a repudiation of the American position in Iraq with all that that would imply?

The most disappointing aspect of Coalition policies to me has been the continued lack of emphasis on tertiary education and on producing a first-rate university system. At a time when investment in education is more important as it has ever been – we will never be competitive with countries like China in mass produced manufactured goods and we cannot operate purely as a rural and mineral products exporter - I think we are not showing foresight. It would be better to be marginally over-investing in education than under-investing as we are.
How will a Rudd government improve the Australian education system?

Finally, maybe there are no sensible reasons for change other than the view that a change once in a while is a good thing. While the long spell of economic progress that has been enjoyed by the Coalition should operate in its favour there might also be the feeling (as Paul Keating has remarked) that it is an inexpensive time to make a major political change. The economy is in good shape and we can afford a few adjustment costs.

What do you think? What is the main reason you will vote as you will? Will tou be voting for a different party this election?

Try to keep your response as free of polemics as possible.

Fat taxes - regressive & ineffective

This paper examines the case for leving fat taxes via dairy products.

The conclusion:

In an attempt to improve the nation's health, many U.S. policy makers have or are considering imposing taxes on the fat in food. Dairy products constitute a large portion of at home fat consumption of particularly harmful types of fat, and nearly all U.S. households consume these products. We estimate a demand system for dairy products, which we use to simulate substitution effects among dairy products and the welfare impacts of fat taxes on various consumer groups. We find that even a 10% ad valorem tax on the percentage of fat would reduce fat consumption by less than a percentage point. Given that the demand for most dairy products is inelastic, a fat tax is an effective means to raise revenue. However, these fat taxes are unattractive because they are extremely regressive, and the elderly and poor suffer much greater welfare losses from the taxes than do younger and richer consumers.

This doesn't surprise me although the objective of the inquiry - fat rather than sugar - does a little. A tax on softdrink - consumed mainly by youth with relatively more elastic demands might have greater impact and do more to address obesity issues.

World weight loss record

Did he look better? Well, yes, but it took a bit of cutting & stitching.

Thanks LC

Hysterics everywhere: Give the Haneef issue a break

The press and the infantile, leftwing blogosphere are having a field day making conjectures that foster views of the innocence or guilt of Mohammed Haneef.

In part this might have been triggered by what seem to be failures in the methods of investigation and in the accuracy of information transmitted by the Australian Federal Police. I say ‘might’ because the more plausible conjecture, given track records, is that this case gives those on the left and in the press the opportunity to manufacture hysteria and concoct foolish, conspiracy theories.

Over the weekend it was suggested that the SIM card was not discovered in the vehicle associated with the bombing. More seriously, NewsCorp papers published an unsourced ‘police’ claim that Haneef was receiving flying lessons and was planning to bomb a Gold Coast high-rise building. The AFP have taken the extraordinary step of denying this claim and the claim that they were the source of this story. Haneef’s solicitor has thrown fuel on the fire by describing the claims as ‘extraordinary’ and protesting at a public rally.

Australia is fast becoming a nation of hysterics who rant over perceived injustices and perceived moves toward totalitarianism even when faced with a possible investigation of a threat of terrorism to our citizens. To the know-all peanuts who pursue this line: Let the AFP and the courts do their job. Have a non-adolescent level of patience and keep a sense of proportion.

Denigrating the AFP, indulging in conspiracy theories and, most importantly, trivialising the pursuit of terrorist saboteurs in Western democracies is irresponsible behaviour.

The events in Italy over the weekend, where the imam of a mosque and two aids have been arrested for training terrorists, confirm that it makes sense to be careful. Terrorism is neither a joke or an evil scheme concocted by conservative politicians faced with a difficult electoral situation. That this is true is evidenced by the support given by senior Labor Party politicians to the actions of the AFP and the Government.

If Haneef is innocent he will be released and can go (or be sent) home. A mistake will have been made in the sense that a mistake is made with any unsuccessful prosecution. If he is guilty then that will be established by the courts. Its a judical system with a presumption of innocence where the innocent get acquitted.

Haneef is not being tortured or being sent to the gulag. He was an associate of people now recognised to be terrorists and is being investigated in a reputable legal system where he will get a fair trial. Leave it at that.

Passive smoking causes health damage

Yobbo suggested in response to an earlier post that there was convincing evidence that passive smoking was not linked to higher incidence of tobacco-related disease. This is an important argument in the context of tobacco regulation since one motivation for bans on smoking in bars and in the workforce is to reduce the health costs of smoking.

Yobbo cited a paper in the prestigious British Medical Journal by Enstrom and Kabat (2003) which, on the basis of a study of 118,094 US adults either married to ‘ever smokers’ or ‘never smokers’, concluded that there was no connection between environmental tobacco smoke and tobacco-related mortality.

A difficulty with this study was that it started in 1960 when smoking was widespread in the workforce so that other sources of passive smoking would impact on non-smokers than having a spouse who smoked. In addition the study ignored quitting behaviour. Both of these factors would tend to understate the impacts of passive smoking on health. You really need a more direct measure of exposure to passive smoking.

There were many other criticisms of the Enstrom/Kabat paper. Indeed the paper generated a vast response of furious indignation partly motivated by the fact that the authors received funding from the tobacco companies. In the view of some research funded by the tobacco companies should not even be published because of fears the companies are attempting to implant 'seeds of doubt' that will distract from the impact of well-justified health warnings. The editors of BMJ did not accept this reasoning and nor do I.

If the Enstrom/Kabat studied is to be refuted it needs to be done using scientific reasoning or on the basis of the types of objections raised above.

The Enstrom/Kabat studied has in fact been seriously challenged by subsequent work. In particular the study was challenged by Whincup et al. (2004) who accounted more satisfactorily for passive smoking impacts by linking measures of passive smoking exposure (serum cotinine concentrations) to coronary heart disease and stroke incidence among 4729 male non-smokers. Cotinine is a metabolite of nicotine that can be used to directly measure passive nicotine exposure. Whincup et al. found substantially elevated heart disease risks among non-smokers – at the highest cotinine levels these risks were elevated 58% although there were no consistent linkages with strokes. Even low levels of cotinine concentration indicated much higher relative heart disease risks of 45%.

The use of cotinine measures to assess the impacts of smoking bans has been pursued by authors such as Adda & Cornaglia (2006) to quantify the effects of smoking bans in public places. They found that bans on public transport and in schools decrease exposure of non smokers but that bans in recreational public places increase exposure by displacing smokers to private places where they contaminate non-smokers, especially children. Others studies (Farkas et al. (1999)) argue that workplace and home smoking bans increase incentives to quit smoking.

Backyard birdwatching - 50 species seen

I keep a tally of the bird species I see from my home in suburban Ivanhoe in Melbourne. Keeping a watchout is part of the great art of pottering around the garden with no specific purpose but managing to fill in many a lazy day. It is also an outstanding way of confirming my 'nerd' status with teenage daughters and disbelieving neighbours.

Remarkably, with the breaking of the drought and the spell of cold weather I have seen 4 new species over the past few weeks – Grey shrike-thrush, Eastern yellow robin, Grey fantail and Musk lorikeet. I had not seen a new species from my home for about a year before that. All of these new birds are reasonably common species in the bush areas around Melbourne but I have never seen them from my house in the 10 years I have kept a tally. The 4 new species take my tally from the house to the half-century mark. My life list of Australian birds seen is a fairly pathetic 550 species.

I think that is amazing outcome for the middle of Melbourne suburbia and a tribute to the conservation efforts of our local Banyule Council who have done such a good job promoting tree planting and nature reserves in the district. The species I have seen are:

1. Australian wood duck (in swimming pool)
2. Pacific black duck (many times, one with ducklings in swimming pool)
3. White-faced heron (flying over)
4. Australian white ibis (flying over)
5. Peregrine falcon (swooping at distance)
6. Masked lapwing (rare)
7. Silver gull
8. Crested pigeon
9. Spotted turtle dove
10. Yellow-tailed black cockatoo (now common, formerly rare)
11. Gang gang cockatoo (once)
12. Sulphur-crested cockatoo
13. Galah
14. Rainbow lorikeet
15. Musk lorikeet (now common).
16. Australian king parrot (rare)
17. Crimson rosella
18. Eastern rosella
19. Red-rumped parrot
20. Fan-tailed cuckoo
21. Laughing kookaburra
22. Superb fairy wren
23. Spotted pardalote
24. White-browed scrubwren
25. Striated thornbill
26. Brown thornbill
27. Red wattlebird
28. Little wattlebird
29. Noisy miner
30. White-plumed honeyeater
31. New Holland honeyeater
32. Eastern spinebill
33. Eastern yellow robin
34. Grey shrike-thrush
35. Grey fantail
36. Willie wagtail (have not seen this common urban bird for 4-5 years)
37. Magpie lark
38. Black-faced cuckoo-shrike
39. Grey butcherbird
40. Australian magpie (white-backed)
41. Pied currawong
42. Australian raven
43. Little raven (flying over)
44. House sparrow (now quite uncommon)
45. Welcome swallow
46. Silvereye
47. Song thrush
48. Common starling
49. Common myna
50. Common blackbird

The mammals I have been, by the way, include:

1. Grey-headed flying fox.
2. Ring-tailed possum.
3. Brush-tailed possum.

What I am reading: Ayaan Hirsi Ali

Ayaan Hirsi Ali’s Infidel revealed much about a woman’s early life in repressive Somalia, Saudi Arabia, Ethiopia and (to a less extent) Kenya. It reveals her joys as she discovers the advantages of living in an open, wealthy society, Holland, where she can work, study and enjoy friendships and romance to an extent impossible in her earlier constrained life.

Most of all, this book reveals her sense that the West does not appreciate the threat that the mindless tolerance of intolerance poses. People who have no tolerance for alternative viewpoints, who threaten dissenters with death and who claim cultural freedom (with hypocritical cries of ‘racism’ and ‘prejudice’) to express their own bigotry, are unwanted in any society.

AHA’s early life looks nightmarish to an external western observer. Indeed it would like look very attractive to any young woman aware of even limited alternative possibilities. Life is materially poor- without much variety and there is a miserable lack of personal freedom, a lack of non-rote-learning education, a lack of personal honesty coupled with an exceedingly harsh family life and, at the social level, a generally atrocious treatment of women and girls.

The mutilation of AHA’s genitals is that part of her story that has received most publicity but it is only a minor part of the tale related here.

The more general story is one of oppression and denial of her most basic human rights. These societies she describes use the words ‘no’ and ‘sin’ excessively to drive much of life which is consequently a boring, drag. That’s why so many people from these societies want to exit and join the very societies their religious leaders so forcefully condemn. They are suffering human beings who carry repugnant social attitudes as baggage with them.

AHA, during her adolescence, accepted the religious and social repression because she knew no alternative. She suffered from the ‘caged bird syndrome’ – even if the door is open she wouldn’t (or couldn’t) fly. For much of the time she sought to establish Islam as the basis for her life – indeed she became unusually religious. Like many adolescents she sought the internal stability that highly structured religious belief seems to provide fanatics who accept its premises dogmatically. The questions she asked about the consistency of various religious beliefs troubled her, in part, because they were not sensibly responded to. As an adolescent I can remember asking the same types of questions to Christian ministers and experiencing frustration that they were also not answered.

But, to AHA, there are differences between a modern Christian upbringing and a fundamentalist Islamic upbringing because, under the latter, there is no personal dialogue within the religion. With the fundamentalist approach religion is a matter of learning the truth as it is presented by God in an ancient text – no role for individual understanding here. Even understanding is inessential – as evidenced by the Somalian requirement that AHA rote learn large slabs of the Koran in Arabic even though she understood almost none of the language. It is stupid.

AHS’s stories reveal interesting vignettes of fundamentalist societies. Their ignorance of other societies, their bigotry and hatred of new ideas, the use of religion to validate oppressive power structures and, most of all, their ignorance. Some of the insights into the rationale for the repression of women under Islam were almost humorous . I recall the notion that if female sexuality were not repressed society would disintegrate and even the bus service would fail as oversexed bus drivers collided with one another! This bullshit is, on reflection, a great way of rationalising oppression.

When AHA went to live in Saudi Arabia she was addressed as the ‘black slave’ by her devout religious teachers and the worm started to turn. She saw women locked in their homes, beaten by their husbands, trapped into loveless marriages with joyless sex and with men they despised. She saw a religion that paid no respect to other religions while demanding it be respected. It was a religion which blamed the ills of the world, and its own failure to establish prosperous, liberal societies anywhere, on ‘long-nosed’ Jews – they crop up everywhere – even ‘Saddam Hussein’ was a Jew! But despite this transparent nonsense AHA remained a devout Muslim and saw the Saudi’s as distorters of religious truth not as indications of the unsoundness of the underlying religion. Indeed she reluctantly accepted an arranged marriage with a man she thought was a traditionalist moron just to please the father she (to my mind) inexplicably idolised. On the way to join this man in Canada she dumped this dummy and fled to Holland where she lied to get her political asylum. I’ve got to say I was overjoyed with her successful deception.

AHA learnt Dutch and got a political science education in Holland. One of the jobs she took to fund her education was working as a translator for abused female refugees - almost all of whom came from Islamic countries. Her attitudes accordingly hardened. Her path to becoming an atheist outright was based on her rejection of her earlier view that it was particular ignorant people who were distorting Islam – to the contrary she saw the religion itself as condemning women to a subordinate role, preaching violence not peace and trapping societies in poverty and despair. This gave rise to the bashings and the female oppression.

AHA’s life in Holland convinced her there was a better alternative – the Western, liberal values that most of us take for granted, provided a more satisfactory way of living and a better way for her to pursue happiness.

The book closes as AHA’s colleague Theo van Gough (director of Submission) is murdered by a cowardly Islamist who threatened that AHA would be killed next. The response of the western left, even in Holland, was firstly to condemn AHA for criticising Islam for not embracing ‘multiculturalism’. This inappropriate guilt by Westerners resulting in the victim of oppression being attacked not the murderous, intolerant, misogynist thugs who sought to kill her.

This response made me feel slightly ill – I am sure the same would have happened in Australia given the same circumstances.

When left wing bloggers and Muslim fanatics denounce AHA as an extremist with a chip on her shoulder and use ‘cultural relativism’ arguments to support Islamic oppression of half of humanity they are just wrong. Despite horrific treatment at the hands of her immediate family AHA loves her parents and does not hold them responsible for her misfortunes.

AHA rejects Islam and has moved on. She is not a fanatic at all. I think she is an attractive, balanced person – good looking, self-honest, intelligent and self-reliant. When she opted out of Islam she was a young woman seeking to choose the direction of her own life and making informed, if risky, choices.

I strongly liked her – and, oddly, she reminded me of me.

Tobacco ban blows ill wind

Passive smoking is dangerous – particularly for young children but for anyone – so the Victorian Government has just joined other states in banning smoking from bars, pubs and hotels. My view is that this will be good for business because most adults are non-smokers and even 60% of smokers want smoking banned in such establishments*.

But I didn’t account for the body odour, beer-induced- flatulence factor. According to The Age this morning (Tobacco ban blows ill wind as pubs scent new dilemma) some bar users regret the lost smell of tobacco in the air because patrons can now smell each other. Smoking they claim usefully masked this smell!

It’s a second-best problem – eliminating one distortion (the tobacco smoke externality) reveals another one that is even more offensive to patrons (human smells). It’s a bit like cleaning up pollution to reveal a more serious greenhouse gas problem – global dimming! Not quite a neat analogy however as these new smells don’t kill you.

But they do reduce the attraction of these venues. I guess there are co-ordination problems in trying to persuade patrons to take the occasional shower and quite a bit of stink will be endogenously generated by the beer and the dance floor.

Capitalism steps in to provide a solution.

‘The unforeseen side effects of the tobacco ban have spawned a range of new products about to be tested by the Victorian hospitality industry.

Instant RockStar director Margie Ardono said the company had smelt an ill wind and developed a scented gel that could be circulated through air-conditioning ducts.

"We have produced a product with tea-tree oil that has been tested by Monash University and proven to eliminate smells, while killing common bacteria" '

Apparently vanilla, rosemary, cinnamon, strawberry and banana are popular that help to overcome an array of unwanted aromas. Why am I so amused by all this?

* The economics of such bans are discussed in P.D. Jacobson & L.M. Zapawa ‘Clean Indoor Air Restrictions: Progress and Promise’ in R.L. Rabin & S.D. Sugarman (eds) Regulating Tobacco, Oxford University Press, Oxford, 2001. Generally the economics of bars in the US (California, Massacusetts and New York City) improved.

Arrow & Schelling on global warming

Economists’ Voice publishes two short articles on climate change by Nobel Prize Laureates in economics, namely Kenneth Arrow (Nobel Prize 1972) and Thomas Schelling (Nobel Prize 1995). Both are good reading.

Kenneth J. Arrow "Global Climate Change: A Challenge to Policy".
http://www.bepress.com/ev/vol4/iss3/art2 (try here).

Arrow is an economist I admire. He writes quantitative economics beautifully and, like so few modern practitioners of this technical art, always sets out clearly the problem he is addressing so that non-specialists can appreciate the main idea. He also picks good problems to address.

Interestingly Arrow had a background in meteorology and worked as a weather officer in the US military. He first became aware of the influence of people on global temperatures in 1942!

In this article Arrow explains why something must be done to limit global warming even if (I don’t think it did) the Stern Report inadequately discounted future costs. He shows that the present value of benefits from mitigation of the ‘high climate’ outcome in the Stern Report – the outcome he considers most plausible - exceed costs even for very high rates of time preference – up to 8.5%. Action to deal with climate change is robust with respect to choice of discount rate.

Thomas C. Schelling "Climate Change: The Uncertainties, the Certainties and What They Imply About Action".
http://www.bepress.com/ev/vol4/iss3/art3 (try here ).

Schelling argues although the uncertainties regarding climate change are many, the certainties create certain urgencies and inaction is an extreme position; he emphasizes technological advance and governmental sponsorship.

Schelling is the one of the leading game theory and strategic thinkers of the twentieth century. Like Arrow he is again excellent at expressing technical ideas in language – indeed unlike Arrow he often uses no mathematics at all. I heard him speak on the Iraq war earlier this year.

Schelling outlines all the uncertainties that plague the analysis of climate change effects but emphasizes the things we do know. We do know that warming is occurring but not how fast. This implies a strong case for R&D programs and for providing economic incentives that encourage a shift away from fossil fuels. The R&D will necessarily involve multiple government since the benefits will not be internalized by private firms and benefits/costs accrue to all nations. Schelling favours research into ‘geoengineering’ of the atmosphere by implanting sulphur particles in it to offset the effects of warming.

Schelling rejects extremism. Both the precautionary principle (act now regardless of costs) and the idea that we should postpone action until damages are certain don’t make sense. Instead look at costs, benefits and probabilities as best known and act in most cases on the basis of taking a sensible insurance policy.

Cigarette century

This remarkable graph from W. Weiss, ‘Cigarette Smoking and Lung Cancer Trends: A light at the end of the tunnel?’, Chest, 111, 1997, summarizes much of what we know about the health history of the cigarette in the twentieth century.

The graph shows percentages of the US male population that smoke compared to male lung cancer rates per 100,000 per year. It’s a pity the graph isn’t extended back another 20 years to about 1900 – data is available – it then illustrates, even more dramatically, the full extent of the cigarette catastrophe. In the early part of the twentieth century smoking cigarettes was a minor part of total tobacco consumption and, correspondingly, lung cancer rates were very low. Cancer rates rose from a low base through to 1920 as the cigarette habit caught on. Rates of male smoking peaked in 1959 and rates of female smoking peaked around 1965. The incidence of lung cancer peaked for both groups about 20-30 years later.

What was interesting was that the connection between cancer and smoking was clearly evident in studies published in the early 1950s. Rates of smoking started to decline soon after that. Cigarette consumption, despite the record of horrific health implications, has shown remarkable resilience but it is gradually fading at least in developed countries.

I recalled this graph because I have been reading the monumentally scholarly account of cigarette smoking in the twentieth century by Allan Brandt, The Cigarette Century, Basic Books, New York, 2007. It’s the most enthralling book I have read this year in many dimensions. I’ll blog on it when I get the time – it’s a serious read.

I liked this book because, first, it provides a fascinating account of the development of a major industry. In 1910 the tobacco industry in the US consisted primarily of one firm, the American Tobacco Monopoly which stood, after US Steel and Standard Oil, as the third largest corporation in the US. Not a bad performance given that 30 years earlier cigarette smoking was virtually unknown in America. Second, the book provides a fascinating account of how modern epidemiological studies, using data from the field, helped to identify society’s most serious public health risk. Infectious diseases had largely been replaced by chronic diseases so methods of analyzing the causes of disease also needed to change. The book also analyses the political and legal responses to the cigarette disaster.

Cigarettes were first smoked in Spain in the early 17th century. They were of poor quality – they fell apart – and their consumption was restricted to the down-and-outs. The French however took to them and built a factory in 1840. However consumption in the US and England was negligible through to the 1880s - the British thought them effeminate compared to cigars, pipes and snuff. Another factor mitigating against their widespread use was their cost – they had to be hand rolled. In 1880 a technological discovery by a Mr. Bonsack provided the means for mass production and James ‘Buck’ Duke, a small tobacco producer, eagerly adopted this innovative machine. As the first adapter of the machine he obtained it for a reduced license fee and thereby produced cigarettes much more cheaply than his competitors. He made a fortune and reinvested a substantial fraction of profits in marketing.

By 1920 cigarettes had come to dominate patterns of tobacco consumption in most countries.

In the early 1960s the British and American governments endorsed major reports, dating back to 1950, confirming the definite link between smoking and lung cancer. The cigarette companies initially denied the link but, by the end of the century, could hardly deny what their own internal scientific data (released under duress) showed. Namely that nicotine addiction drives cigarette sales and there is incontrovertible evidence that smoking is the primary cause of lung cancer and a major risk factor for coronary disease. These documents revealed that, all along, these cigarette producers were deliberately marketing to children and that they knew passive smoking was injurious. It is a fact that one-third of all lung cancers among non-smokers are caused by passive smoking - 3000 passive smoking deaths per year in the US.

The foolish libertarian view that individuals knowingly take risks is the only leg the tobacco companies can now stand on. This is an excuse the tobacco companies themselves introduced as a defence of their industry once the health risks of smoking became incontrovertible. It is a foolish defence because most smokers begin smoking at young ages – the average starting age in Australia is 15.9 years – when young people are at their most impulsive. Impulsivity helps young people to experiment and to begin to cope with and develop adult life roles, but unfortunately it also leaves them prone to various chemical experimentations and addictions. Smoking is a paediatric disease.

Given the dramatic recent declines in youth smoking in both the US and Australia in recent years one hopes that the comparatively brief and disastrous cigarette smoking experience will eventually come to disappear in all countries. In developing countries however the problem is spiraling into a catastrophe of huge proportions - dominating AIDs and other disasters by a mile. Of the world’s 1.1 billion current smokers, 80% live in poor or middle income countries – by 2030 developing countries will claim 70% of cigarette-related deaths. Far more people will die from smoking in the 21st century than in the 20th century and, by 2020, fully one quarter of all deaths in the world will be tobacco-related.

Think of this: 100 million Chinese men currently younger than 29 will eventually die from smoking. Its an amazing statistic.

Probable Ford plant closure

The near certain decision by Ford to close its 6-cylinder plant in Geelong, thereby eliminating 600 jobs, is devastating for the workers concerning and a major problem for the Geelong community. It will be interesting to see how the two parties address this closure issue only a few months out from a Federal election given the planned tariff cuts in 2010 from 10 to 5 per cent. It is a test of resolve and rationality.

Apart from tariff protection the Australian Government has provided enormous assistance to the Australian automobile industry over the last decade in terms of its ACIS scheme. Labor is already committed to an additional $500 million ‘green car’ handout and the government provided Ford with $208 million in 2005 to improve fuel efficiency and $52.5 million last year to develop new models. But the demand for large 6-cyclinder vehicles in Australia, and limited opportunities to export, is insufficient to sustain local production of these vehicles longer-term given persistently high fuel prices.

It is time for Labor and the Coalition to do a deal not to engage in populist politics in response to this development – it would be extremely costly longer-term to rely now on short-term palliatives that create uneconomic investments. The parties should focus on issues involved in getting these Ford workers new jobs. Indeed have a political debate on this. But policies should not be focused on retaining jobs in inefficient lines of activity that have no prospects of longer-term viability.

Update: It happened.

The Cape Experiment

Four Corners last night (‘The Cape Experiment’) examined the effects of welfare dependency in Cape York aboriginal communities. It also showed what a wily, articulate and intelligent spokesman for indigenous Australians Noel Pearson is. Pearson is selling what might seem to be an unpopular message well.

The left think of Noel as a Liberal stooge because he dares to talk about the need for aboriginals to learn to stand on their own feet and because he dares to talk with Federal Aboriginal Affairs Minister Mal Brough. I disagree emphatically - Pearson is simply doing what he can for his people and his sentiments on welfare are heartfelt and based on his life experiences. Its a tough job expressing the views he does because the message is 'tough love' therapy.

Pearson is a great leader - what a great Federal parliamentarian he would make - and Brough is an excellent minister.

The bottom line is this: Aboriginal kids must be fed properly and must get an education. The widespread sexual abuse of children must stop. Aboriginal people must build themselves a future that involves more than sitting around for a social security check. The cheque itself should not be begrudged by anyone - but it is a seductive poison for aboriginal (or indeed any other) communities.

Pearson said:

‘If they don’t take responsibility then we will step in. We want the system to work so that when people don’t take responsibility we’re able to step in … you could lose your freedom if you don’t abide by the conditions'.

Excerpted from the program blurb:

For years Pearson has warned that welfare payments – sit down money - have encouraged irresponsibility and a hand out mentality in indigenous communities. Now he is trying to tackle the situation head on.

In 2006 Pearson’s Cape York Institute began a trial project to rehabilitate several communities on the Cape. Coen, Aurukun, Mossman Gorge and Hopevale have all been ravaged by addiction and abuse. The most controversial aspect of the plan is to link behaviour to welfare payments.

Over the past eight months Four Corners has had unique access to these communities as Pearson and his team have battled to get their vision accepted and implemented. The program tracks both the resistance to these reforms:

"No-one’s going to come from outside and tell me how to spend my dollar. You know I worked hard, drank hard and I still supported my family." Clarence Bowen, aboriginal elder.

As well as the enthusiasm and determination by others to turn their lives around:

"We have to start putting obligations, rules in place in order to see a change here." Mathew Gibson, Mossman Gorge.

The program also shows Pearson’s pragmatic manoeuvring in an election year and his close contact with Brough.

Pearson talks candidly about the tough political choices he has to make: "I harbour my own views but … it doesn’t stop me from seizing opportunities and seeing angles and trying to work the angles to get a result."

Four Corners have usefully put together a useful set of links to various perspectives on aboriginal welfare here. The transcript for this excellent show is here.

Md. Haneef in custody - keep a balanced view

Mohammed Haneef may be innocent on being involved with terrorism but he did associate with at least two men charged with terrorist offenses in the UK and a SIM card of his was found in a burned-out vehicle used to attack an airport in Glasgow on June 30. He had sent an email to an associate saying he had to leave Australia quickly when apprehended – he didn’t mention his wife and child.

Haneef’s treatment in the Australian criminal justice system will be a lot fairer than the justice handed out to Iranian adulterer who, after being jailed for 11 years, was stoned to death last week in a village in Northern Iran. This is the type of society the terrorist scum who are being pursued see as their ideal. By way of contrast, Mr Haneef is being well fed and looked after and has made contact with his family – he has thus far been jailed for a total of 15 days. If he is innocent it will be unpleasant for him but he will get fair treatment in a civilised society.

The deranged left demanding Haneef’s immediate relief, and attacking Kevin Rudd’s support for the detention, ought to feel more sympathy instead for innocent victims of terrorism. If Haneef is innocent he will escape with a short-term inconvenience.

Imprisoning him, short-term, enables the police to search for possible links to terrorism and sends out a signal to those who seek to kill innocent civilians to pursue their hateful political ends, that they shouldn’t regard Australia as an easy target.

Update: Both the Labor leader and the Shadow Minister for Immigration, Tony Bourke support Immigration Minister Andrew’s move to revoke Haneef’s visa. According to Burke, Andrews has 'acted entirely appropriately under the Migration Act'. So he will be held in custody until he faces trial. According to the printed version of The Australian this morning (not online) Haneef was in contact with those arrested in the UK the night before the attempted bombing. It’s the mad left and some (who should know better) on the right who seem to underestimate the scale of the horror associated with terrorism and who, without a scrap of evidence, are labelling the move by Andrews as political, while frothing at the mouth in anticipation of yet another conspiracy-theory-driven scandal.

Religious fundamentalism debases science

The International Herald Tribune carries an article asserting that religious fundamentalists use science to further ideology, not to challenge core beliefs.

Abu Hanieh, who researches and has close ties with militant Islamist movements in the region, says they have their own scientific perspective in which there are simple questions and clear answers. "They have an equation which is one plus one equals two—Israel is the enemy and its allies are apostates, for example," he says.

"If these are the symptoms then this is the disease," he adds. "They diagnose the West and regard it as their enemy. Their mind-set is hard and their knowledge is based on facts, with one opinion and no room for exchanging views."

It was perhaps inevitable, he and others say, that Al Qaeda would seek to recruit Muslim doctors and scientists into its ideology for tactical reasons as well. Zawahri is reported to have sought recruits who could blend in the West.

"Wherever you go in the Muslim world, those who are most violent and most extremist are the ones who have the most scientific tendencies," Abu Hanieh said. "One could even argue that sciences might contribute to increasing one's radical thinking if the radical finds justifications to his philosophy through science," he said.

Dollars to doughnuts

Sir Henry sent me this link to a paper by Jay Bhattacharya for the Hoover Institute on the so-called ‘obesity crisis’. I saw Jay speak at the American Economic Association meetings in Chicago early this year. He is a livewire and a top theorist/empirical researcher in the area of obesity economics. He is a big fan of the Simpsons – fat Homer often plays a central role in his talks.

The question posed is whether getting fat is a public or just purely a private health problem. Jay’s argument is that the costs of obesity are internalised and borne by the fatties when they have employer-sponsored health insurance in the US because fatties are paid less wages than thin people (it is a fact!) and the difference more than covers the extra insurance costs firms must pay. Thus if one has firm-sponsored health insurance payment for being fat occurs by firms paying higher insurance charges which they recover by paying lower wages.

But if insurance is pooled there could be a pooled health insurance is pooled where premiums do not depend on your obesity status. By pooling in the same insurance plan the healthy subsidise the unhealthy by the difference between the unhealthy person’s medical bills and the average medical bills of pool members.

It’s like going out to dinner with a large group of people, knowing beforehand that you are going to split the bill. Though we are loath to admit it, even sometimes to ourselves, dinners like that create a moral dilemma: do I order the lobster or the red snapper, which costs $20 less? If there are 20 people around the table, my lobster order will raise the bill by a dollar for everyone, including me, but I get to eat a meal that is $20 more expensive.

In pooled schemes of the type prevailing in Australia enrollees’ premiums do not depend on body weight and are always much lower than expected medical bills. There is now no wage pass-through that can undo pooling between obese enrollees and taxpayers. This might change the body weight decisions of enrolees creating a public health problem after all.

Bhattacharya and Sood have an answer for the US based on the extreme assumption that all Americans are in a single health insurance pool. They finds the cost of the body weight decisions caused by this extreme pooling is roughly $150 per adult per year. This means that on average, every adult American pays $150 annually to subsidize the extra health care for obese people, roughly the price of one visit to the doctor. It is not a lot.

In practical terms then the obesity epidemic (at least in the US) is not a public health crisis. Most of the costs from poor diet and lack of exercise are paid by the obese themselves. This does not mean that the government should not warn consumers about the dangers associated with some foods, such as those with high trans-fat content. Also, government should get out of the business of subsidizing foods (such as high-fructose corn syrup) through its agricultural policies. But these are information issues not subsidies driven by pooled health insurance.

I suspect the same result is true in Australia. I don’t overeat because the rest of you are subsidising my health insurance costs. I am just a glutton.

Harry goes to a demo

Wandering down Swanston St this morning I got caught up in a demonstration against the 'army invasion of the aboriginal concentration camps' that the 'greatest racist in the country, John Howard' is 'underfunding'. I got there just as a speaker from the 'Wellington Anarchist Collective' (!) had taken the stage from the 'Melbourne Gay and Lesbian Alliance'.

I learnt a lot about the 'racist destruction of the environment' from these national treasures - the 'conscience of the nation' as one modest, pimple-faced interpreter explained to me as some inarticulate aboriginals grabbed the microphone and screamed something about how racist and insensitive it was to walk across Uluru and how would I like it if they walked through St Paul's Cathedral? I inwardly agreed that I would prefer it if they all just took a swan dive (with one and a half twists) off the Prince's Bridge.

I was then handed a petition condemning government plans and told to sign. Rejecting this kind offer I told a furious young man that I thought the Federal intervention into aboriginal affairs was a good idea given that the NT government had done so little. Ominously, a group of red brigade-like terrorists surrounded me and explained, in a flow of consciousness narrative, how the racist, fascist, paternalistic, chemical weapons, drunk, stormtroopers who had violated Iraq and the environment were now raping the aboriginal homelands to advance the interests of mining companies, George Bush and the Liberal Party. The dominant male, who was leading the attack on me, suddenly grabbed a hairy-backed female supporter and said 'let's go and talk to others - let's not waste time with this racist'.

I wasn't quite sure specifically who they were referring to but I saw what they were getting at. But with witchetty-grub-like pains gnawing at my vitals I headed across Swanston St to the KFC to buy a 'two-piece feed'. At the entrance I was accosted by an Animal Liberation supporter who gave me a leaflet that showed how KFC de-beak and de-feather chickens. Deciding I really wasn't that hungry I headed off home.

Driving towards home I reflected on my own lack of political idealism and my thoroughly corrupted middle class values. I do, however, think that personal hygiene is an important issue if you are female and seek to wave bright red flags and flaunt hairy armpits for the Socialist Alliance. Giving the head hair an occasional spell under the shower will help get rid of the mites and increase the dissimilarity between your head and a sheep's rear end.

When is the next demo?

BHP-Billiton rips

When the mighty BHP-Billiton was formed several years ago I criticised the arrangement on the grounds that (i) there was an evident lack of 'economies of scope' - the firms had a commodity specialisation that lay in different areas and, (ii) the advantage offered to Billiton unfairly disadvantaged BHP shareholders. These criticisms might still be true but it is evident that this firm is one hell of a colossus.

The current issue of Fortune lists characteristics of the world's largests corporations - the Global 500. BHP-Billiton is listed as 205th largest company on the planet in terms of revenues (at $32 billion US these are less than 10% of Wal-Mart) but in terms of profits BHP-Billiton is 27th. In terms of rate of return on revenues it is the 6th most profitable large firm on the planet. As a miniming venture BHP-Billiton is easily the most profitable private company on the planet.

On Friday BHP-Billiton's share price came close to $40 up from around $25 at the start of the year. At $40 it would be selling at around 13X earnings which does not look that expensive. Some think that the commodity boom want last forever and I agree. But it will be around for a quite a while. At least that is the implied optimistic expectation of Rio Tinto given its huge ($38b US) and seemingly expensive offer for Alcan. The assumption here must be that the boom will last.

There have been some rumours that BHP-Billitoon might make a higher bid for Alcan but this seems doubtful to me as the greater synergies lie in Alcan being part of Rio Tinto. But wouldn't it shock the world if BHP-Billiton eventually turned around and took a bite a Rio Tinto. It is not impossible. The combined group would then dwalf by a mile Anglo American in terms of revenues gained.

Update: An interesting aricle in The Australian looks at the option of BHP taking out Alcoa for $US55 per share in a deal that would be worth $US50b. If as seems likely Rio gets Alcan it will become the biggest aluminium producerbut if BHP then grabbed Alcoa it would again be largest.

Growing rich in a rubbish dump

A couple of weeks ago I posted on the problems China faces in growing from being an authoritarian communist society where most people had brutalised, difficult lives to a modern, decent society. Here is Business Week’s shot at the same topic with a slightly different emphasis. (By the way, look at the slide slow accompanying this article, the photos are fantastic).

Business Week makes strong claims although it does qualify them with recognition of the scale of China’s achievements. China is portrayed as a mess of administrative failures that thwart its future prospects: endemic corruption, illegal and unsafe products, a stock market that is little more than a casino, an astonishingly despoiled environment that and no social safety net. The economic model used has a single objective – expand production. China’s power structure is one obvious obstacle to reform and yet it seems almost impervious to reform. Moreover, even the Chinese leadership are aware of the systemic problems. Premier Wen Jiabao recently labelled the economy "unstable, unbalanced, uncoordinated, and unsustainable."

Unbridled capitalism delivers the good and the bad – more consumption goods, more pollution – and in China it is delivering the positive benefits to a party-based power elite who will resist reform.

Business Week asks:

‘After decades of efforts by reformers, why assume China will build the financial, legal, and administrative systems required to become a modern industrial society? The only way up is to tame the unregulated, raw self-interest that flows from Deng's historic compromise with the party and the people. That would require a legal system that doesn't let local cadres circumvent regulations, grading officials on metrics that go well beyond simple GDP growth, and capital markets that nurture and reward entrepreneurs. In short, it means getting the party out of business. At this stage, such revolutionary change seems politically impossible. So it's just as plausible that the flawed China we see today is basically what we will have a decade from now, after all’.

It seems to me that this argument is consistent with my earlier post. It is comparatively easy to develop a society from a low resource base by allowing wild-west capitalism. It is much more difficult for a society to escape its history and its social and political traditions.

Global warming swindles denied

I didn't get to see the edited version of The Great Global Warming Swindle that was screened last night on ABC TV. I have however seen it - in full - before and have previously criticised this show strongly. Some of the main errors in the show are set out here.

One of the scientists interviewed for the 'Swindle' show, who was extremely annoyed by the slant it placed on his views in the complete version of this film, was MIT's Dr. Carl Wunsch. He was interviewed last night on Lateline. Wunsch's statement is as sensible a viewpoint on the science of global warming as I have seen. Wunsch accepts that anthropogenic warming is the most likely explanation for what we see happening to the world's climate and is worried about it.

To Wunsch, science is not about claiming truths but about advancing hypotheses that skeptical scientists seek to refute. They have not refuted the anthropogenic global warming hypothesis yet and the evidence collected so far is consistent with it. His general approach - the subject is ultra-complex so we should be wary of strong predictions. But we should take measures to deal with likely serious outcomes as insurance and pay particular attention to gradual, though devastating, consequences of climate change such as sea level change.

The Wunsch interview is excellent value.

John Howard sings his heart out

As readers of this blog know I have a lot of time for our PM John Howard. He is a modest man, self-effacing and a tough, highly intelligent politician. He towers above anyone in the Labor Party for intellectual capacity, lack of pretension and for sound judgement. But, on the basis of current opinion polls, he looks like being replaced as PM by Kevin Rudd and Australia will become a one-party state. This makes me sad but, amidst this sadness, I got a laugh out of this.

Stockmarket investing in 2007

When I started my blog one of the things I wanted to do was develop my interest in making money on the stockmarket into something I could post on. I envisaged initially maintaing a hypothetical portfolio online with some racy tips that would stir the interest of thousands of greedy punters in the blogosphere who would, in turn, reward me with their wisdom.

It never happened. My interest was met with a total yawn. After a few months I shifted the postings I had begun off to my Moneybags site where it now sits unloved by all and for the most part ignored by me. In weeks of peak interest it will get up to 9 visitors.

But I did keep my hypothetical portfolio and, in January, I set myself an ambition to beat the All Ordinaries by a considerable margin in 2007. This I have done - you can read all about it here. As I determined today, the value of my portfolio has increased by 40.5% since the beginning of the year.

I am now off to Dan Murphy this afternoon for a celebratory Bollinger.

I will unwisely spend some of my paper, hypothetical profits on the grounds that I feel good about myself. My tongue is pointed firmly in the direction of those who ignored my wisdom and, to those who did better than I did by ignoring my advice, let me say spitefully, 'your luck will run out'.

Hiding cheap groceries?

No I am not going to post on the nonsense economics of Kevin Rudd.

One of the household magazines I subscribe to is Choice. It’s a consumer magazine that gives you product information and helps you, well, choose. This month it discusses shopping for groceries and does a nationwide test by buying a fairly standard basket of 33 grocery items across 23 cities. In all 111 stores are sampled.

One obvious conclusion – almost suppressed in the Choice write-up – is that Coles stores are, on the basis of this survey, a lot cheaper than Woolworths. It is true in every one of the cities examined without exception. Why is Choice being so coy about this?

The report stresses that Aldi is the cheapest of the lot – true but Aldi has a very limited range of products. The Aldi basket cost just over half the average of all other baskets. But the real comparison for most of us lies between Coles and Woolworths and Coles stores were 7.7% cheaper – over a year a household spending $200 weekly on groceries would save $770. This is a lot – particularly given that margins in this type of retailing would not be expected to be that great. Choice suppresses the finding stating that the Coles items included many ‘specials’ and that, with specials removed, the difference is only 2.6%.

It is difficult to see the point here if the basket chosen was representative given that so many stores were sampled. If it wasn’t representative the Choice survey can be criticized. If it was representative why should a higher incidence of specials be seen as anything other than something positive?

Indeed, to the contrary, the report states ‘There is no runaway winner in terms of the cheapest major supermarket’. On the basis of the data presented by Choice that is not true. Moreover, it is difficult to see the point of a cover story titled ‘Which supermarket costs less?’ if the cheapest major supermarket is not clearly cited.

I wonder what drove Choice to compile this type of report. Markets need good price information for efficiency and this does not help. The online summary of the Choice conclusions is admittedly clearer than the magazine version.

Is our fearless consumer affairs advocate Choice frightened of making clear its findings to major market players? Is it concerned that the representativeness of its survey might be challenged? I’d like a snoopy newsletter, like Crikey.com, to do a bit of probing and – in the meantime - welcome suggestions from readers.

Coles has had a hard time over recent years and ownership looks like it will be transferred to Bunnings. I wonder if the better deals offered at Coles were a symptom or a cause of its lower profitability.

Ultimatum game with testosterone – hormonal economics

The ultimatum game takes the following form: There is an opportunity for Mr A to share some money, say $100, with Mr B but there is a requirement that B accept the offer that only A can make regarding the division of the $100 – otherwise neither player gets anything.

So if A offers B $20 and B accepts then B gets $20 and A gets $80. If B rejects A’s offer then neither party gets anything. The game problem is to work out what A should offer B.
Reasoning backwards A should only offer B a small reward (say $1) and B should accept. Otherwise B gets nothing and is worse off. The paradox is that in experimental situations A generally offers B much more than a minimal amount and, if they don’t, B often rejects the offer even though they are then made worse-off.

This rejection by B seems inconsistent with optimising behaviour.

This game has important implications for situations where a deal is being done and where one party can make an ultimatum to another. So suppose I want to sell my bomb car to you for at least $5000 and I know that you will pay up to $6000 we should be able to do a deal and share $1000 worth of gains-from-trade. If I could put myself in a position where I could credibly make you a take-it-or-leave-it offer then optimising economic theory suggests I should demand $5999 for my car leaving you with gains of $1 and me with gains of $999. Moreover you should accept.

The ultimatum game paradox is that you might well reject this offer, even though it costs you $1, on the 'fairness' grounds that I am getting too big a share of the gains. The idea is that you might not be concerned with your payoff alone but with your payoff relative to mine. In short that you are concerned with your relative status after the exchange.

The Economist this week looks at the effects of a male’s testosterone endowment - a proxy for concern with his status and his aggression - on playing this game. The full article by Terence Burnham is here. The game is played experimentally with males and their propensity to make and accept low offers is related to a measure of their testosterone levels.

It turns out that high testosterone levels are associated with Mr B rejecting low offers although, even though there is a positive relationship, there are no statistically significant effect of testosterone on Mr A’s offer size.

Since testosterone modulates behaviour across many species, and in settings that may be construed to be similar to the ultimatum game, it allows an interesting test of this explanation. If ultimatum game rejections result from the inappropriate activation of reputation-management machinery, then a body of research suggests that rejections will be more probable among high-testosterone men.

High-testosterone animals are more likely to respond aggressively to a challenge, and low offers may be viewed as challenges. Across multiple species, including humans, high testosterone levels are correlated with dominance-seeking behaviour and dominants are less likely to back down from challenges.

The more aggressive one is the less likely you are to take being slighted in a game where some degree of reciprocal altruism might be involved. In settings where people might interact repeatedly punishment may enhance the reputation of the punisher B and alter the behaviour of the punished A. Both routes may produce benefits to the punisher that exceed the cost of punishment. It is likely too that high testosterone would have relatively stronger emotional responses to low offers.

Ultimatum game rejections have become important because mainstream economic theory fails to predict them. This failure has played a role in the rise of behavioural economics. Economics might be improved by an understanding of hormones as well as neurological activity.

Taliban morality

Afghanistan. 10 schoolgirls shot at by machinegunners as they go home from school. Two die. Their crime - being female and going to school.

Don't get angry or feel sad - its a matter of appreciating the distinctive cultural perspectives, tribal and religious values of this ancient civilisation. We've discussed this before.

Quote:

'With their teacher absent, 10 students were allowed to leave school early. These were the girls the gunmen saw first, 10 easy targets walking hand-in-hand through the blue metal gate and on to the winding dirt road.

The staccato of machine-gun fire pelted through the stillness. A 13-year-old named Shukria was hit in the arm and the back, and then teetered into the soft brown of an adjacent wheat field.

Zarmina, her 12-year-old sister, ran to her side, listening to the wounded girl’s precious breath and trying to help her stand.

But Shukria was too heavy to lift, and the two gunmen, sitting astride a single motorbike, sped closer.

As Zarmina scurried away, the men took a more studied aim at those they already had shot, killing Shukria with bullets to her stomach and heart. Then the attackers seemed to succumb to the frenzy they had begun, forsaking the motorbike and fleeing on foot in a panic, two bobbing heads — one tucked into a helmet, the other swaddled by a handkerchief — vanishing amid the earthen color of the wheat'.

Is this what David Hicks and his Jihadist heroes were fighting for?

The road home

This is the NY Times editorial urging US forces to withdraw from Iraq. There are some bold claims from a newspaper that initially supported the rationale for the war and which has to this time rejected calls for a pre-announced withdrawal. It is an honest statement that spells out the costs of the proposal and carefully qualifies the terms under which 'withdrawal' will occur.

'When Congress returns this week, extricating American troops from the war should be at the top of its agenda.

That conversation must be candid and focused. Americans must be clear that Iraq, and the region around it, could be even bloodier and more chaotic after Americans leave. There could be reprisals against those who worked with American forces, further ethnic cleansing, even genocide.

Potentially destabilizing refugee flows could hit Jordan and Syria. Iran and Turkey could be tempted to make power grabs. Perhaps most important, the invasion has created a new stronghold from which terrorist activity could proliferate.

The administration, the Democratic-controlled Congress, the United Nations and
America’s allies must try to mitigate those outcomes — and they may fail. But Americans must be equally honest about the fact that keeping troops in Iraq will only make things worse’. (my bold)

Recognising that the problems identified might occur - these are also the major claims of those who oppose withdrawal - does not lessen their impact and that final bold phrase is asserted not argued. The key question is ‘worse for who?’. I find it hard to believe that the intensity of the conflict inside Iraq and the scale of the killing will subside if the Americans just exit.

The editorial does identify well-known sunk costs – the US has:

‘...created a new front where the United States will have to continue to battle terrorist forces and enlist local allies who reject the idea of an Iraq hijacked by international terrorists. The military will need resources and bases to stanch this self- inflicted wound for the foreseeable future’.

Moreover, because of ‘terrorism and oil’ the editorial is not suggesting complete US disengagement from the region. Nor is suggesting anything other than a gradual reduction in troop numbers over a period of more than 6 months:

‘...the United States will have to continue to battle terrorist forces and enlist local allies who reject the idea of an Iraq hijacked by international terrorists...

The United States could strike an agreement with the Kurds to create ... bases in northeastern Iraq. Or, the Pentagon could use its bases in countries like Kuwait and Qatar, and its large naval presence in the Persian Gulf, as staging points.

There are arguments for, and against, both options. Leaving troops in Iraq might make it too easy — and too tempting — to get drawn back into the civil war and confirm suspicions that Washington’s real goal was to secure permanent bases in Iraq. Mounting attacks from other countries could endanger those nations’ governments.

The White House should make this choice after consultation with Congress and the other countries in the region, whose opinions the Bush administration has essentially ignored. The bottom line: the Pentagon needs enough force to stage effective raids and airstrikes against terrorist forces in Iraq, but not enough to resume large-scale combat’.

The proposal sounds like: let the insurrection proceed and back the side that you want to win with macro -moves such as raids and air support. This will reduce US casualties but leave Iraqis at the mercy of terrorists who the editorial claims the US introduced into Iraq.

The Iraqi Foreign Minister spelt out his view of the specific effects of withdrawal today. They accord with the NY-Times views as expressed above but he sees them, as I do, as reasons for not withdrawing rather than withdrawing. The views favouring withdrawal will certainly provide comfort for the terrorists and their inadvertent allies in the western media. This doesn't mean they are unsound views but it it does mean that you want to recognise this and to be very sure of yourself when such assertions are made.

Smoking addiction among kids

The Age discusses a report by Joseph DiFranza et al (2007) suggesting that young kids - 12 to 13 year olds - get addicted very quickly to cigarettes.

The claim is that some get addicted within a day or so of initiating smoking and 25% within a month. Kids can get addicted to smoking - in the sense of developing a compulsion to use - even when they are consuming much less than an average of one cigarette per day. Moreover, the first smoke can be dangerous.

The work in some respects boosts earlier findings along the same line. The authors put a fair bit of effort into meaningfully characterising the idea of dependence. Thus addiction is not necessarily a slow and gradual process – especially among the young.

This is a somewhat surprising report but not completely so given the strong impact we know nicotine has on the brain chemistry of youth. We know that the earlier people smoke the harder it is to eventually quit. We also know that disruptions to brain development accompany nicotine use occur up to age 25. It is important for young kids not to smoke at all.

Sexual frustration under Islam

I have asked Muslims I know what happens to all the men who miss out on getting a partner in an Islamic society when polygamy is practised? Assuming levels of homosexuality are constant across cultures and that the gender ratio is approximatetely 1:1, won't there be a lot of sexually frustrated men?

This article from Psychology Today suggests that frustration is inevitable and explains the concentration of terrorism and suicide bombers among Muslim polygamist societies as a consequence. The claim is that nearly all suicide bombers are single.

This is a corollary of the idea due to Robert Frank - discussed earlier on this blog - that polygamy favours females at the expense of males.

'The history of western civilization aside, humans are naturally polygamous. Polyandry (a marriage of one woman to many men) is very rare, but polygyny (the marriage of one man to many women) is widely practiced in human societies, even though Judeo-Christian traditions hold that monogamy is the only natural form of marriage. We know that humans have been polygynous throughout most of history because men are taller than women.

Among primate and nonprimate species, the degree of polygyny highly correlates with the degree to which males of a species are larger than females. The more polygynous the species, the greater the size disparity between the sexes. Typically, human males are 10% taller and 20% heavier than females. This suggests that, throughout history, humans have been mildly polygynous. Relative to monogamy, polygyny creates greater fitness variance (the distance between the "winners" and the "losers" in the reproductive game) among males than among females because it allows a few males to monopolize all the females in the group.

The greater fitness variance among males creates greater pressure for men to compete with each other for mates. Only big and tall males can win mating opportunities. Among pair-bonding species like humans, in which males and females stay together to raise their children, females also prefer to mate with big and tall males because they can provide better physical protection against predators and other males. In societies where rich men are much richer than poor men, women (and their children) are better off sharing the few wealthy men; one-half, one-quarter, or even one-tenth of a wealthy man is still better than an entire poor man. As George Bernard Shaw puts it, "The maternal instinct leads a woman to prefer a tenth share in a first-rate man to the exclusive possession of a third-rate one."

Despite the fact that humans are naturally polygynous, most industrial societies are monogamous because men tend to be more or less equal in their resources compared with their ancestors in medieval times. (Inequality tends to increase as society advances in complexity from hunter-gatherer to advanced agrarian societies. Industrialization tends to decrease the level of inequality.)

Most women benefit from polygyny, while most men benefit from monogamy When there is resource inequality among men—the case in every human society—most women benefit from polygyny: women can share a wealthy man.

Under monogamy, they are stuck with marrying a poorer man. The only exceptions are extremely desirable women. Under monogamy, they can monopolize the wealthiest men; under polygyny, they must share the men with other, less desirable women. However, the situation is exactly opposite for men. Monogamy guarantees that every man can find a wife.

True, less desirable men can marry only less desirable women, but that's much better than not marrying anyone at all.

Men in monogamous societies imagine they would be better off under polygyny. What they don't realize is that, for most men who are not extremely desirable, polygyny means no wife at all, or, if they are lucky, a wife who is much less desirable than one they could get under monogamy.

Most suicide bombers are Muslim Suicide missions are not always religiously motivated, but according to Oxford University sociologist Diego Gambetta, editor of Making Sense of Suicide Missions, when religion is involved, the attackers are always Muslim. Why?

The surprising answer is that Muslim suicide bombing has nothing to do with Islam or the Quran (except for two lines). It has a lot to do with sex, or, in this case, the absence of sex.

What distinguishes Islam from other major religions is that it tolerates polygyny. By allowing some men to monopolize all women and altogether excluding many men from reproductive opportunities, polygyny creates shortages of available women. If 50% of men have 2 wives each, then the other 50% don't get any wives at all.

So polygyny increases competitive pressure on men, especially young men of low status. It therefore increases the likelihood that young men resort to violent means to gain access to mates. By doing so, they have little to lose and much to gain compared with men who already have wives. Across all societies, polygyny makes men violent, increasing crimes such as murder and rape, even after controlling for such obvious factors as economic development, economic inequality, population density, the level of democracy, and political factors in the region.

However, polygyny itself is not a sufficient cause of suicide bombing. Societies in sub-Saharan Africa and the Caribbean are much more polygynous than the Muslim nations in the Middle East and North Africa. And they do have very high levels of violence. Sub-Saharan Africa suffers from a long history of continuous civil wars—but not suicide bombings.

The other key ingredient is the promise of 72 virgins waiting in heaven for any martyr in Islam. The prospect of exclusive access to virgins may not be so appealing to anyone who has even one mate on earth, which strict monogamy virtually guarantees. However, the prospect is quite appealing to anyone who faces the bleak reality on earth of being a complete reproductive loser.

It is the combination of polygyny and the promise of a large harem of virgins in heaven that motivates many young Muslim men to commit suicide bombings. Consistent with this explanation, all studies of suicide bombers indicate that they are significantly younger than not only the Muslim population in general but other (nonsuicidal) members of their own extreme political organizations like Hamas and Hezbollah. And nearly all suicide bombers are single'.

Of course these arguments are a bit suspect when it comes to the welfare of women. If women are in scarce supply then extremely strict regtulations might be imposed by men to stop them exerting their market power. There are few societies on earth where women have a narrower range of options than Islamic societies.

Also if women must live with the consequences of terrorism - response attacks by those who don't like seeing their citizens blown to pieces by sexually frustrated bigots - then they will be disadvantaged anyway. I can't see women living with their homes being bombed and their sons and husbands being killed enjoying that much advantage irrespective of their monopoly power.

Excerpted from Why Beautiful People Have More Daughters, by Alan S. Miller and Satoshi Kanazawa, to be published by Perigree in September 2007. Among the other issues analysed are why men prefer blondes and women with blue eyes, why couples with at least one son divorce less frequently, why beautiful people have more daughters, and why male harrassment of women is not sexist.

Thanks Uncle

Harry Clarke was one of the great stained-glassed window artists of all times. This DVD discusses his life. There are many books on him. He mainly lived in Ireland but worked in Sydney Australia for a time and constructed stained glass windows at University of Sydney and in churches around Sydney. He also did A. Beardsley style illustrations for books such as those creepy novels by Edgar Allen Poe. I am told by one section of my family that he was my father’s 'grandfather' but other segments disagree.

I traced my Irish-based family tree back to the voyages my ancestors took out here in the 19th century (yes, one wicked line came here with a chain around one leg) but I never could nail the ancestry thing down.

The old Harry Clarke however was a great artist however and I am happy to bask - legitimately or not - in his reflected glory and to bear his name. Some good pics done by the old HC here.

Postscript: As I have now determined there is (apparently) no relationship here at all. My ancestors were Protestant from Ireland and as FXH points out this famous Harry Clarke was trained by the Jesuits. The Harry Clarke that I am related to was a minor artistic figure who lived for a time in Petersham NSW and who did a number of stained glass windows around Sydney's inner west and, I believe, at the University of Sydney.

Who killed Channel 9?

I’ve just read with pleasure Gerald Stone’s, Who Killed Channel 9? Macmillan 2007. This is an entertaining gossipy read about a key part of Kerry Packer’s empire and the people who ran it. It provides some intriguing vignettes of the big ‘silverback gorilla’ himself but is mainly concerned with the internal politics of a major entertainment provider. One of the great passions of KP’s life was undoubtedly, Channel 9, which he took over from his dad in 1974.

One needs a certain passion in life to outperform and, for thirty years, Kerry Packer gave it to Channel 9. He was a hands-on boss who wanted his business to be numero uno in terms of ratings and hence (the theory went) in terms of dollars. His son James, and ex-print media genius John Alexander, who became CEO of the broader PBL organisation, had more narrowly defined bottom-line approaches - Channel 9 was just a business to them and the objective was to cut costs and maximise short-term profits in the face of a switch in consumer loyalty away from TV to the web. The result was a set of sackings followed by defections of key media brains to Channel 7 and a major decline in the fortunes of 9.

This book could almost be a business school case study but it is probably too much fun. The business itself was full of overpaid prima donnas who made piles of money for themselves and Packer. It faced competition from the web but so too did Channel 7 which stole its thunder.

Cost-cutting and rationalisation might have been necessary at 9 but it wasn’t well done. Hand-shake deals were reneged on, trust was lost, internal power plays dominated good judgement and employees with enormous egos, but also with huge talent, stopped having fun. Figures such as the short-term CEO of 9, Eddie McGuire, emerge as minor figureheads caught in the cross-fire between the cost-cutters and Channel 9’s talent base.

Commercial TV is a fascinating business where gaining an understanding of a complex market is vital. John Alexander knew about print but didn't seem to understand TV. Gut feel, track record and experience as well as passion are the ingredients for success. Kerry Packer, as a human being, is a fascinating composite of cynicism, brutality, sensitivity and high intelligence. He was a powerful man who would not apologise to anyone but who clearly had self-doubt.

I wonder if James Packer will do as well as his father did given his attempts to refocus PBL in the gambling area. JP was probably commercially astute to move away from TV and to engineer the links between Ninemsn and Microsoft. But the gambling industry is political and will run into problems if only because of its huge money-making successes. I’ll watch with interest.

Taxing alcohol & tobacco products

I found this webpage from the Australian Taxation Office on excise charges on alcohol and tobacco products very useful. Taxes ideally should reflect damages of these products which are presumably related to alcohol and carcinogen content respectively. With respect to alcohol this is volumetric taxation rather than ad valorem taxes levied on product value.

All forms of alcohol except wine are taxed volumetrically - at least as excise taxes – though there are quantity discounts for larger volumes sold, I assume in pubs and bars:

1. Low alcohol beer (less than 3% alcohol) in containers less than 48 litres is taxed at $32-78 per litre of alcohol exceeding 1.15% of volume. In larger volumes (greater than 48 litres) the tax drops to $6-54. Low alcohol beer on tap at the pub should be a comparative bargain!

2. High alcohol beer (greater than 3.5%) is taxed at $38-20 in low volumes and at $26-85 in larger volumes again per litre of alcohol exceeding 1.15% of volume. Not such a great bargain at the pub!

3. Other spirits are taxed at $60-42 per litre of alcohol.

Drinking spirits seems to attract an exceptionally high volumetric charge. If damage is proportional to alcohol content it would seem to make sensed to reduce the tax on spirits and raise it on beers. There would also seem to be no obvious basis for the quantity
discounts given to pubs.

Beer has three rates (full, medium and light) purported to encourage responsible drinking, resulting in $0.33 and $0.22 per standard drink. Spirits come out to be $0.75 per standard drink (except for brandy, which for some historical reason is $60.42). The per standard drink rates are taken from an information sheet put out by the Alcohol and other Drugs Council of Australia. So, given that firstly, the tax is paid on alcohol volume, and secondly that the rates are higher for higher alcohol drinks, the system is not only volumetric, but has built in incentives to consume lower alcohol drinks.

Wine is taxed on an ad valorem basis based on value. For cheaper cask wines this means a much lower rate of tax per unit alcohol than other alcoholic beverages.

Wine is thus treated quite differently from beerm, spirits and RTDs.

The problem seems to be mainly with wine. When the GST was introduced and various taxes done away with, the Wine Equalisation Tax was set such that prices didn’t change too dramatically. The WET rate is 29 per cent of the wholesale sale value (ad valorem). This makes it difficult to compare with the rates for other drinks, but the ADCA fact sheet quotes the WET to be about $0.22 per standard drink on bottled wine ($0.69 on a bottle selling for $32, according to a submission to a 2002 Senate Inquiry on the topic) and $0.07 on cask wine.

Wine has a higher alcohol content than beer or RTDs (which must be less than 10%), but the lower tax for most wines could in theory be due to the positive health affects that are attributed to wine. I don’t have any evidence for this next statement, other than the occasional headache after drinking cheap bubbly, but it is possible that the tax system encourages the consumption of wine with greater impurities including methyl alcohols, and hence worse health effects. Whether this is true or not, the very low tax on cask wine is out of proportion to other taxes and is a very weak disincentive to over-consume.

GST is payable on the price including excise or WET (I think paying a tax on a tax is a bit of a rort).

However, despite the volumetric tax which is applied to most alcohol products, it still gets plenty of airplay: “Dr Herron said taxation of alcohol should also be restructured with the aim of reducing harm in the community. ‘The basic taxation should be one determined by the volume of alcohol in the product with the necessary adjustment to promote responsible consumption.’ ” from SMH 31 Jan 2007

With respect to tobacco products:

1. Tobacco is taxed at $0.24301 per stick (for sticks not exceeding 0.8 grams) irrespective of tobacco composition. On a pack of 25 this is $6 per pack.
2. Other forms of tobacco (wet snuff, loose tobacco) the charge is a massive $300 per kilogram.

This isn’t ‘volumetric ‘in intent at all given that there are strong arguments for believing smokeless tobaccos are much safer than cigarettes. Cigars and pipe tobacco also see safer than cigarettes.

Even if damages are more difficult to map in terms of the composition of tobacco this does not seem a sensible arrangement.

Economists would also say that these taxes, in a second-best world, should be larger the less elastic are demands since then the excess burden or deadweight loss associated with raising a given amount of revenue is minimised. Since demands for alcohol and tobacco are quite inelastic this suggests a case for high taxes.

On the other hand some of these goods are often consumed by low income people so, to that extent, the taxes are regressive.

This post might be obvious to people working in these industries but some of these ideas are new to me. I would greatly appreciate knowing if I have got the interpretations wrong.

Pituri – aboriginal chewing tobacco

I am reading about the history of tobacco consumption and will blog on this general topic soon. It is a fascinating story. Wherever tobacco has presented itself as a consumption possibility it has been enthusiastically used. It seems first to have been recognised in South America 15,000 years ago and has been consumed there for 5,000-7,000 years. It spread throughout the American continent and was even consumed on offshore islands where two of Christopher Columbus’s sailors first smoked it in 1492.

In a bit more than 100 years tobacco then spread around the world. People love their tobacco.

Last year while reading Mr Stuart’s Track by John Bailey I found that Australian aboriginals also used a tobacco-like plant. In a conversation Mr. Geoff Drucker mentioned to me that the aboriginals call this tobacco Pituri – it is a chewing tobacco. Geoff was kind enough to send me some information on Pituri and some links that provide further information. Another link I found is here.

Pituri is still consumed today as chewing tobacco and is, on that account, probably safer than smoked tobaccos. Aboriginal consumption of smoked tobacco is a very serious health problem for aboriginal people. It might be that switching to traditional sources of nicotine might improve aboriginal health.

I am working on aboriginal smoking issues so this is very interesting information.

These are the notes Geoff kindly sent:

‘Leaves, flowers and flowering stalks are highly valued by the Aborigines as chewing tobacco with nicotine and nor-nicotine content being up to 25% of the dry weight of plant material. Pituri is the term used by the Aborigines for the ball of chewing tobacco. Pituri is prepared by drying and powdering the leaves of the nicotine plant and mixing with ash from a variety of different specially selected species. It is rolled up into quids (balls) that are 6cm long and 1.5cm in diameter and then chewed. The mixing of the alkaloid ash with the plant material renders the alkaloids more available when chewed and ingested. When it is not chewed it is put behind the ear like bubblegum. The chewed tobacco is used as a token of friendship, of which it has taken on the significance of a social event.

Pituri is mixed with ash as the nicotine is liberated from the acids through the action of the alkaloids present in the ash. The ash promotes the rapid absorption of the nicotine into the bloodstream through the thin tissues of the lips and mouth and probably through the skin behind the ear (Latz, 1995). There are certain species that are used to manufacture the ash within the pituri....

The initial effect of pituri is as a stimulant, later however the user begins to fall a bit heavy and finally sleepy. In small quantities the pituri can assuage hunger and enable long journeys to be undertaken without fatigue and with little food. It can also be used to excite the participants before fighting....

The quids are sometimes mixed with threads of native flax (Psoralea spp.) to make the pituri stick together. If preferred plants are unavailable then small amounts of I.petrae are added to less popular Nicotiana leaves to give the quid extra strength. Aborigines also used the smoking of the burning leaves of D.hopwoodii as an anaesthetic, where the usage of the plant in the circumcision of boys during their initiation ceremonies was frequently practiced.

Today: Most Aboriginal people who chew tobacco use either native tobacco (also called 'bush tobacco') or loose smoking tobacco. People mix the dry, crushed material with ash and form it into 'quids' using saliva. They place the quids between the teeth and cheek. Nicotine is absorbed through the lining of the mouth (mucous membrane). The drug effect is similar to smoking tobacco. Chewing is restricted to around Central Australia and is practised mostly by women.
There is currently no evidence that chewing tobacco in the way it is done in Central Australia has any long-term, harmful effects on people's health’.

Source: Entheogens & Salvia Teaching Plant Forum: ‘Duboisia Hopwoodii’ and Katie Littlejohn, 1998.

University VC pay in Australia

The big earners are listed in The Australian, Higher Education Supplement.

In comparison, Prime Minister Howard will get $330, 356 annually if re-elected this year. Among other things the article states, in relation to La Trobe University:

'Senior management at La Trobe closed ranks this week when the HES queried a listing in its 2006 annual report that shows someone - believed to be former vice-chancellor Brian Stoddart - received between $1,470,000-$1,479,999 last year.

A well-placed source told the HES the figure was the combined annual remuneration and a $948,000 payout for Professor Stoddart, who assumed the top job at short notice when Michael Osborne resigned in late 2005. Professor Stoddart left in December after it was announced Paul Johnson would succeed him'.

I don't know if this information is correct or complete but it does seem a lot of money. Of course once the envy is foregone it is essential to demand good performance from highly-paid leaders in all fields.

Practical congestion pricing solutions for Sydney

Courtesy of Heath G at Catallaxy I learned of this interesting proposal to levy congestion-dependent charges to access the bus lane on Sydney’s Harbour Bridge. Motorists would be charged $5, $10 or $20 to escape congested lanes and travel on uncongested lanes into the city. They would be charged more as levels of congestion rose and more people sought to use the lanes.

I doubt introducing this facility would do that much for congestion since only one lane of traffic is involved but I still think it is a good idea. People with a high value of travel (the rich and those running late with an urgent need to visit the city) are effectively bribing, via the public purse, other motorists to get to the front of the queue. The trade yields efficiency gains since every motorist is potentially advantaged – those using the lane get to the city quicker while those not using the lane get given a transfer via the public purse.

For dealing with congestion I would turn this arrangement on its head. I would alternatively price all access roads to the city (not just roads across the bridge) except for a few roads or, on multi-lane roads, except for a few lanes, which would be left unpriced. Then motorists would be given a choice of getting to the city without excessive congestion but paying a fee or travelling under congested conditions and not paying a fee.

This arrangement overcomes a major practical objection to road pricing that it is politically unacceptable. As Harrington et al. (1998) show the political acceptability of road pricing increases if you give motorists choices of this type. With reasonable charges most motorists would use the priced roads and lanes leaving the unpriced roads and lanes congested but not unreasonably so.

Sydney is one of the most beautiful cities in the world. Vancouver, San Francisco and Stockholm would be among its rivals. As an ex Sydney-sider I regret the way life in Sydney is becoming dominated by congested car journeys. This detracts from the superb amenity values and agglomeration economies of living in such a beautiful city. Practical ways need to be found to limit low-value journeys into the city and a mixed system of tolled and un-tolled roads is one way to go.

Agricultural subsidies make Americans fat

This intriguing article from the New York Times blames farm subsidies, which often favour junk high carbohydrate foods, as the reason for record US obesity.

Payments for farmers were started in the 1930s during the Depression to help save family farms but now it costs billions and benefits 1/3 of the nation’s farmers. The 2002 farm bill provided $143.3 billion for nutrition programs like Food Stamps, $16.8 billion for conservation and $67.6 billion to subsidize planting of certain crops. Most subsidies go to 5 commodities: soybeans, corn, rice, wheat and cotton. Fruit and vegetable farmers get none.

Critics say the subsidies lead to cheap snack foods and soft drinks, made from ingredients like high fructose corn syrup and partially hydrogenated soybean oil. Meanwhile, the lack of subsidies for fruits and vegetables makes them expensive by comparison. From 1985 - 2000 the cost of fresh fruits and vegetables increased 40% while the price of soft drinks decreased by almost 25% adjusted for inflation.

Calories from those subsidized foods are partly responsible for the epidemic of childhood obesity and the increased incidence of diabetes.

Workers’ paradise in China

The peasant in China has received a raw deal for thousands of years. Now with China’s move to a market economy some of these brutalised peasants are running China in conjunction with their former communist bosses. Because former abused kids cause further abuse the oppression in China is continuing.

Chairman Mao, is still officially venerated as a demi-god. He was, in fact, the ‘biggest mass killer in human history’ being instrumental in having 70 million people killed thereby taking the title of king among mass murders, by a good margin, from Hitler and Stalin. Not someone to hero worship.

After Mao the new progressive ‘pro-market leadership’ has continued to manage a country steeped in barbarism. In the last few weeks it has been revealed that 1000s of Chinese peasants, including many young children, have been sold into slavery in brick kiln factories. Not in just one location but across the country and not by ‘capitalist roaders’ and criminals. Well not officially at least - police and party officials were actively involved in the enslavement of these unfortunates. The workers’ state?

Even refugees into China from North Korea are sold into prostitution in their thousands. It’s a measure of the desperation of the poor North Koreans that they would think of escaping to China.

Ghandi said we judge a society in terms of how it cares for non-human life. But non-human animal life has absolutely no protection under Chinese law. The consequent cruelty to animals is unimaginable.

China is the world’s largest greenhouse gas polluter and has 16 of the 20 most polluted cities on earth. It is the armpit of Asia. Desertification and destruction of water resources are occurring on a massive scale. This partly reflects incompetence as well as Chinese barbarian-peasant indifference to the environment.

What a curriculum vitae for a country!

I make these hostile remarks because I tire of being told of the Chinese ‘economic miracle’.

Tire of hearing about their ancient ‘culture’.
Tire of listening to the bigoted posturings of the Beijing tyrants.

Tired too of the Communist Party lies. The West is asked to tolerate Chinese enslavement of Tibet and to passively accept China’s planned takeover of Taiwan. The motherland has its ‘rights’. It even has the ‘right’ to tell our leaders not to even meet the Dalai Lama because he is a ‘splitist’. But the DL is a man with more humour, charisma and intelligence than the whole Chinese Communist Party.

It’s a simple observation: Ending communism in China is not enough. Democracy coupled with respect for human rights is essential. But even this isn’t enough if democracy means choosing from a field of formerly-abused children. Somehow an ethic needs to develop which eschews barbarism and xenophobia in relation to other peoples beliefs and hostility towards the natural environment. Economic development might eventually promote this but, in the interim, we should be suspicious. Given their origins the Chinese leaders and their potential replacement need serious therapy and education.

Otherwise, the nouveau riche barbarians who were themselves abused as children (in conjunction with aristocratic communist dictators) will run China. They will continue to damage their own people and the world.

Doctor Do No Harm

The arrest of an Indian doctor (Mohammed Haneef) based in Queensland in connection with the attempted terrorist bombings in Britain is a fearful development for Australia. This takes the number of arrested doctors to 6 in total. As I write another doctor is being interviewed in Queensland although as yet he has not been arrested.

The arrest strengthens my conviction that a terrorist attack within Australia is inevitable. While the probability of any individual being killed or injured is low the damage to Australian society will be significant (though contained). To the people harmed it will be little comfort that they were the unlucky ones.

Haneef came to Australia on a 457 visa. Screening procedures for these visas clearly should be reviewed and attention directed to what are clearly high risk categories. It would be prudent to tighten eligibility for entry into Australia under this class of visa. Skill shortages need to give way to more important considerations. Most importantly, are security concerns being overlooked when supposedly skilled potential migrants are being considered for entry?

As a matter of long-term planning I am assuming that the most stringent eligibility restrictions are being applied to the regular immigration program and the refugee/humanitarian program. We are admitting 144,000 under the regular program and 13,000 under the humanitarian program in 2006/07. A low error rate here in detecting terrorists here, if maintained over a number of years, would significantly augment supplies of local terrorists and leave us in the position of Britain.

Aussies in Afghanistan

The Four Corners show this week Forward Base Afghanistan described the work of Australian combat troops and military reconstruction teams. The latter are doing a 'backyard blitz' series of projects - slow projects doon't make an impact - and training schemes that are appreciated by the locals and the Afghan Government.

The Australian army officers are well-trained (cautiously friendly rather than trigger happy) and well equipped. There are only 1000 of them - but they are doing a good job. The program transcripts are here.

Afghanistan a most beautiful rugged country. The people largely uneducated, cautious and war-weary.

London road pricing

Ken Livingston, Mayor of London, argues that congested cities should mimic the successful London congestion pricing scheme.

Of course I agree - all the major east coast cities of Australia for a start. In London it reduced congestion, didn't damage retail sales (the city has just become more livable and convenient), increased use of public transport and bicycles and now receives broad public support. Yes they had to expand and improve the public transport system but they did that with revenue from the congestion charges.

Interesting things I was not aware of:

• The priced congestion zone has doubled in size and traffic volumes within the larger zone are falling.
• The pricing will be adjusted to reflect carbon emissions.

When will Australia get politicians with the guts and foresight to take the sorts of initiatives Ken Livingston has fostered and which are being pursued in Stockholm? Most of us live in large cities and current policies that avoid comprehensive pricing are failing.

My previous posts on congestion pricing include attempts to account for the Victorian Governments unwillingness to consider it, partial pricing and income distribution and comparisons between Melbourne and London.

Remember

Tom Rush on memory.

Thanks Bernd

Smoking ban Victoria - avoiding the chook's bum

The smoking ban in Victorian pubs, clubs, bars and gaming houses (except for Crown’s high-roller rooms) came into place last night. An on-the-spot fine of $110 is levied on both smoker and bar-owner for an offense – it increases to $550 if the offender takes the matter to court and loses.

I don’t often go to these types of ‘entertainment venues’. I generally get more pleasure out of watching paint dry or ‘Karate Kid’ movies than going to a smelly bar that serves poor quality wines. If I do go to a bar I always do notice the offensive stale tobacco odours. Of course great wine bars, like Walters on Southbank, are notable exceptions - no smoke and fine wines.

I went to a Flinders Lane bar last Wednesday and I’ll try the same place again this week to see the short-term customer response. My guess is that bar patronage will improve. Smokers will step outside for a fag and non-smokers (now 83% of the adult population and only 10% of youth now take up the habit) will feel free to breathe again. As most smokers would prefer to quit this policy helps them in that regard. Indeed today's Age confirms that 60% of smokers favour the ban.

Bar staff who have no longer to inhale filthy fumes will clearly be better-off provided jobs are not lost. To the extent that smoking and cigarette consumption are complement goods, bar sales from smoking customers might drop off a bit but this will be offset by new customers.

The casinos and poker machine venues will lose – players will have to leave the machines to have a fag and might then regain their sanity - but as I would prefer to see these anti-social institutions bankrupted that won’t cause me grief.

And, yes, to those young homeless lovebirds - yes I wish I was one - seeking a smooch in a dark alley after imbibing a belly full of grog in a bar. It must be pleasant, for a change, to taste some real human saliva rather than to suck on an orifice that tastes like a chook's bum. Put down any increased osculatory pleasure to the smoking ban.