This maybe harsh on BERL and they have probably walked a tricky rope balancing the scope of the brief from the Law Commission and providing a robust evaluation, but when your having those problems you should talk to your client (or put a professional caveat on the report) about how there are problems with the result due to the narrow scope. This has been done on a number of reports I’ve seen.

Again its like Arthur Anderson siging off the Enron accounts, by looking at the corner of the room we can confirm there is no dancing elephants in the conrner of the room…

1) BERL’s responsibility: A CBA of alcohol use in NZ would be an enormous undertaking. BERL weren’t asked to do it so why would they? They’re not a charity and there is a large opportunity cost to their researchers’ time.

You misunderstand me. I am not saying BERL should have done something they weren’t asked to do, and I am certainly not saying they should donate their time to do it. I think my position on this, explained above, is pretty clear.

You have made a value judgment that costs should be weighed up against benefits when judging the harm from alcohol usage. The Law Commission apparently feels differently. BERL have not taken a stance either way, and why would they? They’re not policy makers.

I didn’t say that because I don’t believe it. The way to count harm is to define what it means and then go count it. BERL did that, albeit very badly. The LC’s mistake is to think this has policy implications. That is not supported in economics if welfare maximisation is your objective. Pointing out that the welfare effects of a policy cannot be tested using a gross cost analysis is not a value judgment, it’s a fact. Both BERL and LC have made that mistake, BERL explicitly and LC, so far as I have seen, implicitly. And I didn’t say BERL has taken a stance. In fact they are careful in their report not to advocate policy. But theirs is not the methodology of a dispassionate observer. They have produced an analysis using a mehtodology that could not find anything except what it found. The time and effort to write that report was not an information discovery and learning process. It was an exercise in giving credibility to one or two bad assumptions and give the huge numbers resulting from it the veneeer of credibility.

Here’s a value judgment: whether it is them or their client that ordered those assumptions is uncertain, but I can tell you as a former professional economist I would resign before putting my name to that analysis. I choose not to be in the business of misleading people.

The fact is that others have misunderstood what their methodology is capable of detecting and BERL has not come out and put them straight, either up front of after the fact. They are apparently content to see non-economists and policymakers deceived by what they have written.

I can buy that the med lit starts finding harmful effects if you’re drinking a bit more than 2 pints a day. But is it anywhere near plausible that drinking at that level means you get zero enjoyment from your drink? Hell no. Instead, that level gives a plausible point for starting to knock back the amount of consumer surplus! I’d believe that. Setting it to zero once you hit 4 ounces more than 2 pints beggars belief.

If something seems unduly obscure, sometimes there’s a reason for it. Look for the monster hiding beneath the sheet….

Ben: I disagree with you but only very slightly. A pint is more than a standard drink. It’s my standard drink, but more than an official standard drink. http://en.wikipedia.org/wiki/Standard_drink . A half litre is two standard drinks, and a pint is a little more than a half litre, at least in the parts of the world that measure these things correctly.