What’s wrong with happiness measurement ? (crossposted at Crooked Timber)

John Quiggin10 Comments

Over at Club Troppo, James Farrell summarises the main elements of the economic research agenda on happiness, and some of the standard objections to it. For those who came in late, and probably didn’t imagine economists ever thought about happiness, the crucial finding is that “Cross country data shows pretty consistently that on average happiness increases with income, but at a certain point diminishing returns set in. In the developed world, people are not on average happier than they were in the 1960s.”

The data that supports this consists of surveys that ask people to rate their happiness on a scale, typically from 1 to 10. Within any given society, happiness tends to rise with all the obvious variables: income, health, family relationships and so on. But between societies, or in Western societies like Australia over time, there’s not much difference even though both income and health (life expectancy, for example) have improved pretty steadily for a long time.

I’ve long argued that these questions can’t really tell us anything, and an example given by Don Arthur gives me the chance to put it better than I’ve done before, I hope.

Suppose you wanted to establish whether children’s height increased with age, but you couldn’t measure height directly.
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Revising my priors

John Quiggin43 Comments

Looking at the desperation with which opponents of climate science, and of sensible policy responses such as Kyoto, are holding on to positions that have clearly become untenable, has prompted me to think about my own views on a range of issues, to see whether I am holding on to beliefs that can’t be sustained in the light of accumulating evidence.

The most obvious problem for me is that of continued macroeconomic stability in the face of trade and current account deficits driven (or so it seems) by speculative asset price booms. I’ve long argued that such deficits can’t be sustained and that neither Australia nor the US is on a path to a smooth adjustment. However, while deficits have continued and, in the case of the US, grown steadily, evidence of anything but smooth adjustment is certainly thin on the ground.

The rapid growth of China, and the apparent willingness of the Chinese government (and maybe also the public) to hold low-return $US assets and to buy large quantities of commodity exports from Australia has rendered previous projections largely irrelevant. While the “Bretton Woods II” story that emerged a couple of years ago seemed implausible to me, it has held up pretty well so far.

While I’m not ready to join the optimists just yet, it’s clearly necessary to rethink the implications of a Chinese economy that is already a substantial part of the global total, and growing rapidly.
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RSMG back on air

John Quiggin2 Comments

Things have been pretty frantic at the Risk and Sustainable Management Group (my research team at UQ, focusing on the Murray-Darling and related issues) as we raced to prepare five papers for the Australian Agricultural and Resource Economics Society meeting in Queenstown NZ last week. There’s lots of news about this at the RSMG blog.

We’ve also had a complete redesign of our website, which is now located here. We’ll be updating Working Papers and adding lots of publications in the near future.

I plan to write more about water and climate at this blog in future. Discussion much encouraged.

Revising my priors

John QuigginLeave a comment

Looking at the desperation with which opponents of climate science, and of sensible policy responses such as Kyoto, are holding on to positions that have clearly become untenable, has prompted me to think about my own views on a range of issues, to see whether I am holding on to beliefs that can’t be sustained in the light of accumulating evidence.

The most obvious problem for me is that of continued macroeconomic stability in the face of trade and current account deficits driven (or so it seems) by speculative asset price booms. I’ve long argued that such deficits can’t be sustained and that neither Australia nor the US is on a path to a smooth adjustment. However, while deficits have continued and, in the case of the US, grown steadily, evidence of anything but smooth adjustment is certainly thin on the ground.

The rapid growth of China, and the apparent willingness of the Chinese government (and maybe also the public) to hold low-return $US assets and to buy large quantities of commodity exports from Australia has rendered previous projections largely irrelevant. While the “Bretton Woods II” story that emerged a couple of years ago seemed implausible to me, it has held up pretty well so far.

While I’m not ready to join the optimists just yet, it’s clearly necessary to rethink the implications of a Chinese economy that is already a substantial part of the global total, and growing rapidly.
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Another own goal for the denialists?

John Quiggin141 Comments

Blogospheric opinion has divided on predictable lines over the Queensland Land and Resources Tribunal’s rejection of objections to a new coal mine by environmental groups who wanted offsets for the carbon emissions of the mine. Brickbats have come from Andrew Bartlett, Tim Lambert and Robert Merkel, while Jennifer Marohasy and Andrew Bolt have cheered the Tribunal and its presiding member, President Koppenol.

But this looks awfully like an own goal for the denialists to me.
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Dead zones

John Quiggin61 Comments

Another of many alarming reports about environmental damage that may be linked to climate change. In this case, the result is the emergence of dead zones in the ocean, the immediate cause being changes in currents.

Examples like this emphasise the point that uncertainty about global warming is not a reason for doing less, but a reason for doing more. The known (but uncertain) possible consequences of doing nothing add a lot more to the expected costs than do the known (but uncertain) possibilities of adaptation and so on producing lower-than-expected costs. Even more important, the ‘unknown unknowns’, that is, the possible consequences of which we are not yet aware, are dominated by nasty surprises that await us if we continue changing the climate rapidly.

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Hicks and treason

John Quiggin82 Comments

Peter Costello makes the plausible point that, if the charges against David Hicks are true, he could have killed Australian soldiers. But the same story in the SMH goes on to say

Australia has steadfastly refused to ask for Hicks to be released from Guantanamo because he could not be tried for his alleged crimes in Australia.

How can this be true? Under the Australian Criminal Code,

“A person commits an offence, called treason, if the person:

….
(e) engages in conduct that assists by any means whatever, with intent to assist, an enemy:
(i) at war with the Commonwealth, whether or not the existence of a state of war has been declared; and
(ii) specified by Proclamation made for the purpose of this paragraph to be an enemy at war with the Commonwealth; or
(f) engages in conduct that assists by any means whatever, with intent to assist:
(i) another country; or
(ii) an organisation;
that is engaged in armed hostilities against the Australian Defence Force; or

I can’t see how the alleged crimes for which Hicks is to be tried in the US are not covered by this crime (note, by contrast, that it is not necessarily a crime for an Australian to fight against the US, which explains the constantly shifting charges brought against Hicks there).

This has been tightened up a bit since 2001, when the relevant section of the Crimes Act read

(d) assists by any means whatever, with intent to assist, an enemy:

(i) at war with the Commonwealth, whether or not the existence of a state of war has been declared; and

(ii) specified by proclamation made for the purpose of this paragraph to be an enemy at war with the Commonwealth;

….

(f) forms an intention to do any act referred to in a preceding paragraph and manifests that intention by an overt act;

but it seems clear that if Hicks agreed to fight with the Taliban against a Coalition including Australia, as claimed in the charges against him, he’s guilty of treason.

The only meaning I can impute to the government’s position is that Hicks could not be convicted of treason because the evidence the American prosecutors plan to use (confessions extracted under torture, hearsay and so on) would be thrown out of an Australian court.

Phoenix or ashes?

John Quiggin36 Comments

It’s not that long ago that people like Alan Gilbert (then Vice-Chancellor at Melbourne, and now at Manchester) were presenting the for-profit University of Phoenix as the future of education, and its critics as Luddite equivalents of the 19th century handloom weavers. It was obvious even at the time that U Phoenix was little more than a grandiosely titled trade school, occupying one of the relatively limited educational niches where for-profit firms have traditionally played a role. But even here it seems, there are pretty big problems, with a graduation rate of only 16 per cent for students without previous college experience. However hard you spin it,* this is an unimpressive result.
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