It seems that you’re relying on second or third hand information from people who’ve only skimmed the report to critique it.

Pot. Kettle. Black.

Before posting on here, I have downloaded and read some of the report, and exchanged emails with the study’s author. Good enough?

It seems that you’re relying on second or third hand information from people who’ve only skimmed the report to critique it. Many of your questions might be answered somewhere in the 181 pages of the report’s body so maybe check that out. It’s freely available at BERL’s website

For high risk drinkers, employers have difficultly identifying, let alone punishing, such behaviour.

I agree with Paul, this is an extreme take on the matter. No employers can work out who’s responsible for the combined billions of dollars in lost productivity. No promotions and no salary increases are made with any knowledge of the beneficiary’s work performance?

An extreme assumption indeed. I’d like to see the literature supporting that claim, Adrian.

Incidentally, I believe that single assumption – all lost productivity costs are put on the employer because the employer cannot punish workers who are unproductive due to drinking – is the reason BERL counts that lost productivity as a social cost. That’s around $2 billion right there IIRC.

But even with that extraordinary assumption, I suspect it is still wrong, because it remains a cost between two private parties and cannot drive a wedge between private social equilibria. Is this discussed in the BERL report? With so much riding on it I hope the analysis on this is good.

To paraphrase Dr Cullen, it takes a peculiarly warped sense of values to equate the output lost due to premature mortality with rational consumption choices.

Adrian, I know you are commenting in a personal capacity, but isn’t this simply a value judgment that BERL has no specific expertise in? Yet are we to take it that this idea that maximising life expectancy is an appropriate public policy goal and an idea motivating your analysis?

Because that is, I think, a goal that can take public policy in some very odd and tyrannical directions. Like taxing or outright banning of all activities that reduce life expectancy.

I submit that a policy banning, say, hang gliding (which I assume shortens life expectancy relative to people who don’t run off cliffs for fun) is plainly going to lower the welfare of some rational people. Which immediately tells you that quality and quantity of life can be a trade off for rational people. From which it follows that life expectancy and welfare are not consistent with one another.

Michael Cullen’s claim is obviously false. Rational people are willing to trade off life expectancy for life quality. Its hard to see how that is at all inconsistent with utility maximisation.

Right. I’m off to eat my all time favourite food lasagne in the full knowledge that a chicken salad sandwich would add several minutes to my life expectancy. Call me crazy.

First in response to “BERL should have made the LC very aware of…”. We didn’t prepare the report for their consumption. As with anything that enters the public domain, it is the consumer’s right to interpret it as they see fit and for them to take responsibility for their reaction to it, not for the author to manage their response to it.

I have to say I find this repsonse rather disingenuous. Nobody is arguing the LC does not have the right to use your report when it’s in the public domain. What is being argued is that they have plainly not understood the mismatch between your narrow terms of reference and the wider terms required to properly assess policy. They may not realise they only have half the story they need. As author of the study you are in the best position to point out to the LC their misunderstanding. The danger is that policy is being called for on grounds that cannot be justified. With respect, this raises real questions about integrity that can be put to bed by a public statement that the analysis conducted by BERL cannot, in its current form and on its own and by design, provide any guidance to the welfare effects of policy.

I note that you make a fundamental mistake (twice) in your executive summary by confusing costs with welfare effects. If you’re going to cling to that mistake here then you probably think the LC is using your report in exactly the way it was intended. Frankly, I think this report is going to damage some professional reputations.

Counting the costs (or benefits) of non-harmful consumption were irrelevant as they do not impose a social cost, and benefits were out of scope.

I’m confused by this. Aren’t these non-harmful costs ignored precisely because they are at least offset by presumed benefits of rational decision making, i.e. the net social cost is zero or positive? So you are counting benefits here. Where is the consistency?

…and a non-verifiable argument (e.g. if someone consumes a good the claim that the private benefits must equate or exceed the costs is not verifiable).

But that is a comment that can equally be pointed at your methodology. Defining a point of harm and then assuming zero consumption benefits beyond that appears to me to be a much stronger assumption than assuming, on average, people do things that add to well being. How exactly did BERL verify zero beenfits for all drinkers defined as drinking harmfully?

I think I’ve said enough for now.

A couple of quick points.

“We didn’t prepare the report for their consumption. As with anything that enters the public domain, it is the consumer’s right to interpret it as they see fit and for them to take responsibility for their reaction to it, not for the author to manage their response to it.”

But some indication that such a report is not a good bases for policy would be helpful. Policy should be based on net benefits, that is benefits minus costs, not just cost considerations. And if the conclusion are being used wrongly why should you not complain?

(e.g. if someone consumes a good the claim that the private benefits must equate or exceed the costs is not verifiable).

Revealed preference?

“It is unlikely that many harmful drinkers, for example, rationally decide (or can be modelled as deciding) about their drinking behaviour and career prospects.”

What of rational addiction models.

“For high risk drinkers, employers have difficultly identifying, let alone punishing, such behaviour. ”

Why? Punishment seems easy. Don’t promote them or fire them, for example. If you can’t identify them how big can the problem be?

“To paraphrase Dr Cullen, it takes a peculiarly warped sense of values to equate the output lost due to premature mortality with rational consumption choices.”

Why? This could just be the result of a trade-off between quality and quantity.

BTW, I should have noted in the first line that I know Matt N AND rauparaha – given that Matt didn’t create this post.

http://www.tvhe.co.nz/2009/04/30/alcohol-and-addiction-part-ii/