{"id":9696,"date":"2021-01-29T12:24:23","date_gmt":"2021-01-29T12:24:23","guid":{"rendered":"http:\/\/www.economicsobservatory.com\/?post_type=question&#038;p=9696"},"modified":"2021-02-26T15:32:51","modified_gmt":"2021-02-26T15:32:51","slug":"devil-in-the-detail","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/news-devil-in-the-detail","title":{"rendered":"Devil in the detail"},"content":{"rendered":"\n<p><strong>Newsletter from 29 January 2021<\/strong><\/p>\n\n\n\n<p>It being Friday, the main course in this week\u2019s newsletter is fish. And if you\u2019re going to talk about the economics of fish in the UK, you\u2019d better start with Scotland. It\u2019s the country\u2019s piscatorial powerhouse, making up almost two-thirds of UK output.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Share of UK gross value added in fishing and aquaculture by UK country, 2018<\/strong><\/h4>\n\n\n<section class=\"blocks__chart\">\n    <div id=\"chatEmbed759467\" class=\"blocks__chart-svg\"><\/div>\n\n    <script>\n        var spec = {\"$schema\":\"https:\\\/\\\/vega.github.io\\\/schema\\\/vega-lite\\\/v4.json\",\"description\":\"Share of UK gross value added in fishing and aquaculture by UK country, 2018\",\"height\":250,\"width\":{\"step\":110},\"data\":{\"values\":[{\"Region\":\"Scotland\",\"%\":61},{\"Region\":\"England\",\"%\":30},{\"Region\":\"Wales\",\"%\":3},{\"Region\":\"Northern Ireland\",\"%\":6}]},\"mark\":\"bar\",\"transform\":[],\"encoding\":{\"x\":{\"field\":\"Region\",\"type\":\"nominal\",\"sort\":[\"Scotland\",\"England\",\"Wales\",\"Northern Ireland\"],\"axis\":{\"labelAngle\":0},\"spacing\":100,\"title\":\"Nation\"},\"y\":{\"field\":\"%\",\"type\":\"quantitative\",\"title\":\"Share of UK total\"},\"color\":{\"value\":\"#e54753\"}}};\n        var view = new vega.View(vega.parse(spec), {\n            responsive: true,\n            renderer: \"canvas\", \/\/ renderer (canvas or svg)\n            container: \"#chatEmbed759467\", \/\/ parent DOM container\n            hover: true \/\/ enable hover processing\n        });\n        view.run();\n\n        vegaEmbed('#chatEmbed759467', spec);\n    <\/script>\n<\/section>\n\n\n<p>As a new <a href=\"http:\/\/www.economicsobservatory.com\/how-is-brexit-affecting-scotlands-fishing-industry\">Observatory article<\/a> by Graeme Roy and Stuart McIntyre explains, the Scottish fishing industry has faced a tough start to the year, largely the result of the post-Brexit trade deal.<\/p>\n\n\n\n<p>The UK\u2019s waters, set out in the map below, are productive. They account for around a quarter of the value of fish landed by EU member state vessels in the North Atlantic, with the main EU players being France, the Netherlands and Denmark.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">UK fishing waters<\/h4>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"497\" height=\"527\" src=\"http:\/\/www.economicsobservatory.com\/wp-content\/uploads\/2021\/01\/Fishing-waters.png\" alt=\"\" class=\"wp-image-9699\" srcset=\"https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/Fishing-waters.png 497w, https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/Fishing-waters-283x300.png 283w\" sizes=\"(max-width: 497px) 100vw, 497px\" \/><\/figure>\n\n\n\n<p>The value of UK waters means that access is highly coveted, which helps explain why fish became a fault line in the final stages of negotiating a new trading relationship. The resulting EU-UK Trade and Cooperation Agreement is <a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/PDF\/?uri=CELEX:22020A1231(01)&from=EN\">1,449 pages long<\/a>. Skimming it alongside our more manageable article, three things jump out.<\/p>\n\n\n\n<p>First, the sheer complexity. The monster document, translated into <a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=uriserv%3AOJ.L_.2020.444.01.0014.01.ENG\">24 languages<\/a>, shows why trade deals take so long. A search for \u2018fish\u2019 returns 368 results and that is just the start. The market analysis is split out by species and the sea in which they swim. <a>As well as detail on haddock and row after row of catch data (cod have five entries, sole boast seven), there are reams of analysis on weird and wonderful sounding fish: horse mackerel, great silver smelt and the western spurdog. The <\/a><a href=\"https:\/\/britishseafishing.co.uk\/roundnose-grenadier\/\">plight of the roundnose grenadier<\/a>, a deep-sea fish first ignored then almost fished out of existence, is an economic tale all of its own.<a href=\"#_msocom_1\">[AL1]<\/a>\u00a0<\/p>\n\n\n\n<p>Second, the emergence of a sensible plan. As Graeme and Stuart explain, despite all this complexity, the fishing deal comes down to two things: access to waters and access to markets. The trade deal prevented the imposition of high tariffs (taxes on exports could have been up to 25%) and sets out a gradual decline in EU access over the next five years. Sudden shocks \u2013 via spiking prices or slashed quantities \u2013 are, in theory, averted.<\/p>\n\n\n\n<p>Third, the tough reality of trade. The problem with the plan is that modern trade barriers are more subtle than tariffs and quotas. They work through red tape, as the World Trade Organization explains <a href=\"https:\/\/www.wto.org\/english\/thewto_e\/whatis_e\/tif_e\/agrm9_e.htm\">here<\/a>. Post-Brexit, Scottish fishers have been caught in new net of customs checks, certificates and declarations. These, so-called \u2018non-tariff barriers\u2019 can grind trade to a halt. Scottish firms have seen crates of crabs and lobsters sitting in ports for 30 hours. The future for these firms, particularly the smallest, is uncertain, as <a href=\"http:\/\/www.economicsobservatory.com\/how-is-brexit-affecting-scotlands-fishing-industry\">Graeme and Stuart explain<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What value to put on a life?<\/h3>\n\n\n\n<p>The complexity of designing policy extends to other big questions that current circumstances have thrown up. The biggest of all is how to value life, discussed by<a href=\"https:\/\/www.birmingham.ac.uk\/staff\/profiles\/business\/mcdonald-rebecca.aspx\" target=\"_blank\" rel=\"noreferrer noopener\">Rebecca McDonald<\/a> of the University of Birmingham in <a href=\"http:\/\/www.economicsobservatory.com\/safety-from-infection-how-should-covid-19-policy-make-the-trade-offs\">thought-provoking new Observatory article<\/a>.<\/p>\n\n\n\n<p>The starting point for the analysis is that when making a policy decision \u2013 from the value of a new medicine to the cost of lockdown \u2013 a measure of the value of a life may be needed. There are various options:<\/p>\n\n\n\n<ul><li>The \u2018value of a statistical life\u2019: the monetary value we put on someone\u2019s life. <a href=\"http:\/\/www.economicsobservatory.com\/valuing-statistical-lives-how-should-such-metrics-inform-pandemic-policy-making\">A related Observatory piece<\/a> reports that this is put at \u00a31.53 million in the UK (2010 prices).<\/li><li>The value of a life year: if a shock or policy has a differential effect by age, policy-makers might want a measure that reflects this. In such cases, the life of a young person or child may be more highly weighted that the death of an octogenarian. The current UK value is \u00a360,000 per year.<\/li><li>Quality-adjusted life years: the idea here is that a year of robust living should be valued more highly than a year spent in ill health. This measure is used by the NHS, with numbers as low as \u00a315,000 per year.<\/li><\/ul>\n\n\n\n<p>Putting aside the brutal logic of all this, there are still huge problems. First, the variance in the numbers used is shocking. Joanna Coast and Sabina Sanghera <a href=\"http:\/\/www.economicsobservatory.com\/valuing-statistical-lives-how-should-such-metrics-inform-pandemic-policy-making\">report<\/a> that one 2016 study finds a range of \u20ac1,000 to more than \u20ac5 million per life year. Making reasonable policy choices when the inputs are so wide seems impossible.<\/p>\n\n\n\n<p>Even if a sensible number could be found, Rebecca\u2019s article explains the difficulty in using it as a practical tool for policymaking. The metrics each rely on the idea that more \u2013 whether that\u2019s more lives, more years or more quality \u2013 is better. But these simple sums don\u2019t always line up with people\u2019s ethical choices.<\/p>\n\n\n\n<p>One example is the \u2018moral machine\u2019 test that almost 40 million people from 200 countries have taken. (You can try it here: <a href=\"http:\/\/www.moralmachine.net\/\">www.moralmachine.net<\/a>). Participants are asked to tell an autonomous car what to do when faced with tough choices \u2013 for example, hit a wall, which leads to the driver\u2019s death, or swerve and kill a pedestrian. The results reveal our moral inclinations: law-breakers tend to get mown down in the simulation, even if young. Women are more likely to be spared than men.<\/p>\n\n\n\n<p>Another shortcoming of the \u2018valuation\u2019 approach is the importance of fairness. Rebecca\u2019s own research shows that people have strong preferences for an equitable policy. They want even-handed rules and regulations, even when these lead to a higher number of overall deaths. This means simple sums should not guide policy. The article explains in more detail and <a href=\"http:\/\/www.economicsobservatory.com\/safety-from-infection-how-should-covid-19-policy-make-the-trade-offs\">sets out a route forward<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">I predict a riot<\/h3>\n\n\n\n<p>Sometimes an article contains a fact so stark that it makes you rethink policy completely. For nearly 60 years, Britons aiming for university have filled out UCAS forms (UCCA forms in their original, 1961, incarnation). The deadline for these applications is today. Universities then make offers based on predicted grades. These guesses are important: they can influence a young person\u2019s life. But they are made by teachers that know the kids, and the exams, very well. So, how good are teachers\u2019 crystal balls? An unrepresentative poll of two people in our house agreed that 80% accuracy would be decent, and 70% acceptable.<\/p>\n\n\n\n<p>The real number, highlighted in an <a href=\"http:\/\/www.economicsobservatory.com\/should-students-apply-to-university-after-theyve-got-their-exam-results\">Observatory piece<\/a> by Lindsey Macmillan and University College London colleagues, is 16%. This casts doubt on the entire system. The biases are depressingly obvious. Teachers systematically over-predict results, except for kids from poor backgrounds, who get predictions that keep them out of top universities.<\/p>\n\n\n\n<p>An overhaul is clearly needed, and the authors propose a system of post-qualification admissions, or \u2018PQA\u2019. The school year would change, with a short, sharp exam period in May. Kids would then stay on until July, receiving grades and applying on the basis of hard data rather than their teachers\u2019 woeful clairvoyancy.<\/p>\n\n\n\n<p>The policy is set out in detail and it is convincing. The only wrinkle I can see is the 18-year-olds themselves. At my own further education college, telling kids they had to return to the classroom after their last exam would have resulted in a ruck. As all the pieces this week show, making good policy is a tough challenge.<\/p>\n\n\n\n<p><em><strong>Richard Davies, Director<\/strong><\/em><\/p>\n\n\n\n<p><\/p>\n\n\n\n<h6 class=\"wp-block-heading\"><strong>Photo by Luan Rezende from Pexels<\/strong><\/h6>\n","protected":false},"featured_media":9702,"template":"","categories":[231,492,237,232],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Devil in the detail - Economics Observatory<\/title>\n<meta name=\"description\" content=\"Supporting the fishing industry after Brexit; deciding how university places should be allocated based on young people\u2019s exam results; putting a value on human life to inform decisions about healthcare or lockdown \u2013 current examples of the complexity of effective policy-making.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.economicsobservatory.com\/test\/news-devil-in-the-detail\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Devil in the detail - Economics Observatory\" \/>\n<meta property=\"og:description\" content=\"Supporting the fishing industry after Brexit; 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