Cherry picking tobacco data

Following on from Christian Kerr’s article this morning Stephen Koukoulas has resorted to appealing to ABS data on tobacco consumption (table 8):

Making a mockery of The Australian’s story is the fact that, in seasonally adjusted volume terms, consumption of tobacco is 5.3 per cent lower in the March quarter 2014 than in the December quarter 2012 when the plain packaging laws were introduced.

To be fair to The Kouk that is true. But let’s have a look at the (seasonally adjusted) data itself.

Tobacco - consumption

Looks to me that the first full year of plain packaging resulted in an increase in tobacco consumption – contrary to the stated aim of the policy. The decline in the first quarter of this year is more likely due to the 12.5% increase in tobacco excise that came into effect in December.

Bottom line – not even the ABS data support the plain packaging policy.

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46 Responses to Cherry picking tobacco data

  1. .

    The drop off, caused by regulation or taxes, simply helped the black market.

    Kouk actually is gleeful about smoking dropping, but totally ignores the black economy.

    Its as though he thinks ABS figures are an absolute truth.

    Turns out he can’t even analyse them correctly.

  2. The Kouk has nailed it.
    Seen another way, the best measure of the effectiveness of the plain packaging policy is the amount of opposition from vested interest making a quid out of people slowly killing themselves using tobacco.

  3. Aristogeiton

    If the previous government actually gave a shit about harm minimisation, they would have regulated e-cigarettes and allowed them to be sold freely in Australia.

  4. .

    For a good laugh, read my comment then 1735099′s directly after it.

    Makes it look like Kouk aims to disappoint.

  5. C.L.

    BLAM!

    That’s gotta hurt, Kouk.

    ————————————————————

    To get an idea of the number of tax-free cigs pouring into the country…

    2012: ["]Criminals["] reap huge profits by importing ["]illegal["] cigarettes.

    A Customs’ “profitability scenario” said a 40-foot shipping container held more than 9 million cigarette sticks…

    In the past four financial years, Customs has seized 924 tonnes of tobacco and 322 million cigarettes.

    For those 322 million probably 1000 million got through.

    They launched a war on smoking.

    They lost.

  6. Craig Mc

    I bet Numbers still thinks The Kouk was right about Swan’s surpluses.

  7. Gab

    I bet numbers believes Swan delivered surpluses.

  8. Infidel Tiger

    The Kouk has nailed it.

    The Kouk has done more to damage the reputation of Greek economics than Greece itself.

  9. C.L.

    How come Numbers is backing the wacko right-wing war on drugs?

  10. Infidel Tiger

    They launched a war on smoking.

    They lost.

    Secretly Labor and the Greens are desperate to get kids smoking and drinking.

    Nothing else can explain the bizarre Alcopops Tax and Plain Packaging debacles. Both of which I notice The IlLiberals have done nothing to repeal.

  11. H B Bear

    The Kouk has nailed it.

    How embarrassment.

  12. Neil

    Is the y-axis the amount spent or the amount smoked??

    The Australian implied there has been a small increase in the amount smoked but a shift to cheaper cigarettes so the amount spent has dropped.

  13. Phill

    I wasn’t aware that smoking was seasonal. What is the validity of seasonally adjusting this data?

  14. Infidel Tiger

    I wasn’t aware that smoking was seasonal. What is the validity of seasonally adjusting this data?

    It probably goes through the roof during school holidays. Kids love smoking. Keeps the weight off and it looks super cool.

  15. MemoryVault

    What is the validity of seasonally adjusting this data?

    Perhaps next time things are slow around here, one of our econometrickal types can explain why any data is “seasonally adjusted”. Then after that they can explain why companies pay tax.

    I’m not trying to be funny. My knowledge of economtricks is zilch.
    But “seasonal adjustment” of data, and company tax, are two things I’ve never, ever understood.

  16. Andrew

    I don’t know which is funnier – the Kouk’s ignorance, or Numbers agreeing with Kouk under a chart that explains the Kouk’s error with arrows and labels even a young child can understand.

    Sinclair seems to have a soft spot for leftist economists, so what’s the rules here around Kouk? Are we required to tiptoe around our true opinions, or is he fair game to beat like a Howard piñata at the ABC Eid al-Fitr party?

  17. Demosthenes

    why any data is “seasonally adjusted”

    To account for temporary seasonal variations that would obscure the underlying trend. I really don’t know why it would apply to cigarettes, though!

  18. MemoryVault

    To account for temporary seasonal variations that would obscure the underlying trend.

    Sorry, Demosthenes, but that tells me diddly-squat.
    We have four seasons, and they happen each and every year.
    Any “temporary variations” resulting from them must surely be part of the “underlying trend”, not something to be ignored and/or “adjusted out”?

  19. 2dogs

    I wonder how much of the 2014 decline is due to an unmeasured substitution of black market tobacco (chop-chop) in response to the price signal?

    Anecdotally, I have noticed more people rolling their own cigarettes lately.

  20. Infidel Tiger

    Anecdotally, I have noticed more people rolling their own cigarettes lately.

    There’s quite a few schizos around the shopping centre near me who spend all day picking up cigarette butts. I feel desperately sorry for the elderly, infirm and demented who have been priced out of the pleasure of a smoke by the fascists.

  21. Bruce of Newcastle

    I’d like to see a graph of this, but I suspect that data is not available.

    Betcha there’d be a spike in March 2014.

  22. Des Deskperson

    The promo for tonight’s ‘The Project’ was on about ‘Big Tobacco’ cooking the books through dodgy data.

    Whatever the accuracy of the data, I find Ten’s folk Marxist distain for grubby commerce somewhat bizarre, given all the crap they crudely flog – ‘Shape and Tone’ being a contemporary example – plus them being in bed with ‘Big Groceries’ through Coles sponsorship of Masterchef.

  23. laugh out loud

    I am just waiting for the industry to release their data. Anyone have a link? Then I will make up my own mind. I understand the industry says it is commercial in confidence. Bullshit.

  24. AP

    Perhaps people smoke more at Christmas or something. Or maybe in winter. Then hit the gym in spring. Who knows. Maybe they buy smokes when the fill the car up, and they fill up more often in the summer? Who really cares? Fact is if the data exhibits a seasonal nature, it can be “seasonally adjusted”. It doesn’t mean the unadjusted data a should be ignored though.

  25. Demosthenes

    We have four seasons, and they happen each and every year.

    The terminology is misleading you. ‘Season’ in this sense means something like “a time period during the year with a particular characteristic”, like hunting season.

    Any “temporary variations” resulting from them must surely be part of the “underlying trend”, not something to be ignored and/or “adjusted out”?

    If we know that, for example, retail spending increases by x% every Christmas, then obviously we can’t claim that seasonal variation is showing a genuine increase in consumer confidence or an improvement in the underlying economy. You have to subtract the predictable seasonal variation to find out what’s actually happening.

  26. MemoryVault

    If we know that, for example, retail spending increases by x% every Christmas, then obviously we can’t claim that seasonal variation is showing a genuine increase in consumer confidence or an improvement in the underlying economy. You have to subtract the predictable seasonal variation to find out what’s actually happening.

    I’m sorry, Demosthenes, but I’m still in the dark as to why we do these things. I would have thought that, if economics was to have any value, it would be to to tell us what is happening, and what is likely to happen, not what happened, which is more readily discernible elsewhere.
    Let’s take the example you quote:

    Anybody who has worked in discretionary retail for any length of time, will tell you retail spending does NOT increase by “x%” every Christmas, according to some economic formula. Christmas spending varies wildly, depending the previous year’s economy generally, the economic outlook for the year ahead (as personally perceived by the guy in the street), and the types of goods sold at the particular retail outlet.

    If I am running a toy shop, for instance, and it has been a relatively poor year because things have been tight for everybody, I can probably expect a good Christmas. Why? Because when money is tight, mums and dads and grandparents tend to save up for Christmas.

    Conversely, if I am a retailer of high-end camping goods, and next year is looking a bit grim for everybody, then I can expect a slow Christmas regardless of how good the previous year has been, because dad knows he’s not going to be able to take the family camping as often as he used to.

    Averaging these two results together to produce an “x%” factor for Christmas is meaningless to the two retailers involved. Taking that “average” and using it to “seasonally adjust” sales for the entire year becomes even less meaningful, except as figures for economists to draw pretty multi-coloured graphs to use in university lectures and in “reports” to government departments.

    In the REAL world, it is worse than pointless, it is misleading.

  27. Andrew

    Seasonal variation is used to adjust data to show if changes in the dependent variable is not due to time but other factors. The Christimas example is perfect because consumer spending rises at Christmas in contrast to other times of the year, so seasonal variation adjustments ‘neutralise’ the time factor. It’s that simple and is an important tool to use.

  28. hzhousewife

    Perhaps people smoke more at Christmas or something.

    Correct, it’s party time. Same as other holiday weekends or times for
    socialising eg Anzac Day. In the retail store I work in, tobacco sales
    are at least five times what they used to be while cigarette sales are half
    (compared with say ten years ago).

  29. MemoryVault

    Yes MV but what about a sex toy shop?
    Lube sales down this quarter…

    Exactly my point, Ren.
    Maybe it was stinking hot, or too cold, for bedroom games.
    (Not a problem until we priced air-conditioning out of use).

    Either way it tells me utterly nothing about the economic situation generally.
    Or what happened in the economy immediately before, with regard to lube sales.
    Nor what is likely to happen in the economy in the immediate future, with regard to lube sales.
    And “seasonally adjusting” it against some arbitrary figure of what somebody thought should have happened in the relevant period, simply further obfuscates the information.

  30. Ren Hoek

    Get Kouks to knock me up a graph with lighter sales and maybe that will spark my interest.
    To the tune of The Doors “Light My Fire”

  31. Demosthenes

    MemoryVault, I’m sure some of your points are valid points of contention, as there are numerous ways to calculate the required seasonal adjustment and therefore a variety of ways of approaching the issue. However the basic concept itself is the opposite of misleading – its purpose is to make the signal clearer amongst all the noise. Maybe some of the many economists who frequent this blog can explain better than I did.

  32. Ubique

    Numbers befuddle Numbers.

  33. Ubique

    Numbers numb Numbers.

  34. Ubique

    Innumerate Numbers is numbed by numbers.

  35. incoherent rambler

    Dr Richard Vucinic, 37, is accused of writing prescriptions for high doses of Xanax, Diazepam, Valium and the testosterone supplement Sustanon for Hells Angels associate James Turner and his girlfriend Alyce Bertola.

    So, let’s hand prescription cannabis over to the honourable profession.
    Trust me, I am a doctor self interested.

  36. laugh out loud

    Still waiting for the industry to release their data. Their usual complete dishonesty. And why a journalist and an editor would allow this on page one without seeing and verifying the data shows how standards have fallen for this paper. More bullshit.

  37. Demosthenes

    Incoherent, by that logic we should take ALL prescribing power away from doctors.

  38. Aristogeiton

    incoherent rambler
    #1336933, posted on June 7, 2014 at 7:55 am
    [...]
    So, let’s hand prescription cannabis over to the honourable profession.
    Trust me, I am a doctor self interested.

    You’re an idiot.

  39. incoherent rambler

    Aristogeiton, maybe.
    And maybe you can explain how we prevent corruption of a profession when we add illicit drugs to their prescriptive capacity?

  40. Aristogeiton

    incoherent rambler
    #1337282, posted on June 7, 2014 at 3:28 pm
    Aristogeiton, maybe.
    And maybe you can explain how we prevent corruption of a profession when we add illicit drugs to their prescriptive capacity?

    Well, they won’t be illicit then, will they fuckass?

  41. Yon Toad

    The Kouk is at the forefront of those who are scared shitless that there are people out there capable of making up their own minds about anything. He and his ilk think they are just so much more intelligent than the rest of us so we must do what they dictate. Back in the day we called people like The Kouk and his mates dickheads. Some of us still do.

  42. .

    rambler

    I really wouldn’t care. Doctors should only advise, pharmacists know more but I don’t want them to tell me what to do either.

    A HMO system where professionals collaborate is probably best.

    The idea that marijuana is only medical is a bit too big government for me. No one has ever died from pure cannabis they’ve grown themselves. Dr Lester Grinspoon insists that the literature says so.

  43. Calling It

    The Kouk got it right. You guys should actually read what he said about the increase. The increasing wholesale sales before the increase in excise is due to retailers and addicts stocking up before that scheduled increase in excise bites.

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