Wednesday, December 15, 2021

Ignoring age and COVID risk is unscientific

I listened to a frustrating Sam Harris podcast about COVID policy yesterday. What struck me about these "expert" commentators was that they

  1. kept finding reasons to link COVID policy back to Trump, which was weird, and
  2. all but ignored the enormous age variation in COVID risk. 

Both these seem like popular ways of thinking, unfortunately. 

I want to comment briefly on the second issue. This should help explain why I support vaccinations for the elderly but feel strongly against vaccinating children, vaccine targets and mandates. 

The risk of serious illness or death with COVID is far more age-skewed than most viruses. In the below figure I show this skew. COVID is a serious disease for the elderly.

I also plot vaccine risks in the dashed orange. You might not be able to see it because it is so close to the axis. For age 70, the benefit-to-cost ratio of the vaccine is about 250x (i.e. the blue line is 250 times higher than the dashed orange line). A great outcome and something anyone would be foolish not to recommend. 

But exponential curves are deceiving. Let's zoom in on this curve for young age cohorts. I do this below (curve equation is 10^(-3.27 + 0.0524xage)). Notice now that we are way down near the vaccine risk. It's close. I show a broad range of risks and call this COVID curve the risk of serious illness. I do this because reality doesn't follow the neat equation I used to plot the curve and children are likely even lower risk than shown. 

In short, because the age skew of COVID risk is so severe, these huge many-hundred-times benefit-to-cost ratios can reverse at low ages so that the costs are many times the benefits. This is why so many doctors are calling for a halt to mandates for vaccinating children. 

We should let this well-known information about COVID guide us rather than politics and panic. 

Saturday, December 4, 2021

Did Germany and Tokyo really get affordable housing through planning?

Not that long ago Germany as a whole featured heavily in this debate over planning rules and house prices. With Frankfurt topping the latest UBS real estate bubble index, and Munich at number four, we don’t hear much about that anymore. 

Tokyo is another city where planning rules are argued to have led to cheap housing.

Have we all forgotten that Tokyo was the world’s most expensive city not that long ago and is famous for how small its dwellings are? It also has less than 50% homeownership. 

Across the central 23 wards of Tokyo, there are only 19sqm of dwelling space per person. Only 22% of Tokyo households have more than 29sqm of space per person. Across the prefecture as a whole, there are about 30sqm per person of residential space. 

Australia has about 90sqm of internal residential space per person—roughly three times as much as Tokyo. Australia would need to nearly triple its population without building a single extra dwelling to have the same "housing abundance" as greater Tokyo, and would still have way more private garden space.[1]

Yes, there is an overall trend in Japan towards more dwelling space per person. But this is driven mostly by the rise in elderly households, especially elderly singles. When an elderly couple remains in their home after their children leave they increase the floor space per person even if that young adult child moves to an apartment with less space than their share of space at their parent’s home. When one person from an elderly couple dies, they leave behind an elderly single-person household, boosting the floor space per person metric. Many countries whose ageing populations are not as advanced as Japan’s will also see this same trend automatically.

Another issue is Japan’s long period of deflation. CPI is up 10% in Japan in the past three decades, while it’s up 300% in the US, for example. Average wages have also been flat for decades. It is not a good idea to compare rents or prices in Japan without factoring in their unique wage and consumer price conditions.

Overall I’m not persuaded that a housing market more like Tokyo’s is desirable. On the more substantial point that relaxing town planning rules got that outcome, I find little evidence.

fn [1] I’m wary of charts like the one below since the only statistics I know about dwelling sizes rely on self-reported estimates by various ad hoc surveys by statistical agencies.

There are also reporting differences of the floor area of new homes. For example, enclosed garages attached to a home are included in floor area in Australian new homes, but not US homes