A blindingly good piece of economic research hereJuly 11, 2014July 11, 2014 Tim Worstallblogs24 CommentsOtherwise known as the Centre For Global Development being full of shit. Go read. previousOn The Guardian and Nando’snextSigh 24 thoughts on “A blindingly good piece of economic research here” john77 July 11, 2014 at 4:49 pm Read Looks impressive Next question – what was the LME price? You know – the one that is the reflection of world trade and, for a large part pf world trade, the benchmark. Tim Worstall July 11, 2014 at 4:55 pm The Zambian export prices look pretty close to world prices to me for that time period. Copper cathode, currently, $7-$8 a kg. The idea that Switzerland was shipping commercial quantities at $50 is simply absurd, total nonsense. A few kg here or there (and customs prices should include transport costs as well, so you send a few kg by Fed Ex Air then you’ve got some very expensive material recorded in that customs database). Hell, I’ve shipped someone $40 worth of stuff, 1 kg of it, (not copper) then stuck $200 on top for the grief of trying to send just one kg. Bloke paid happily but the customs declaration was 1 kg at $240, obviously. Ironman July 11, 2014 at 5:11 pm This isn’t a poorly researched report; this is false witness. The CGD was trying to blame world food price fluctuations on ‘speculators’ as well. Zambia is a poor country but a good country with good people, it doesn’t need Cobham or the CGD. Christie Malry July 11, 2014 at 5:14 pm Some possible ways to respond to this: 1. “That’s really interesting. Clearly, we need some time to reflect upon your comments, but we look forward to engaging with you on this important issue” 2. “Thanks for your comments. Unfortunately, you’ve failed to take account of X, Y and Z, which invalidate your argument…” 3. “Damn, looks like we got it wrong. Thanks. We’ll be sure to issue a full correction” Instead, it looks like both organisations are just ignoring Maya and hoping both she and her argument will go away. Meantime, the remaining few grains of credibility of Christian Aid, the Centre for Global Development and all who sail in her drain away. bloke (not) in spain July 11, 2014 at 7:26 pm Started reading the thing. Got as far as the purported Swiss price for copper cathode…. I buy this stuff as rolled sheet for roofing, By the kilo. Don’t these people touch down in the real world, for a second & think that’d make one of those reels of house-wiring cable in B&Q £150 a pop. The hot water tank in your airing cupboard three or four hundred. Er maybe you’re missing something here, peeps. No? S’pose this is what a university education does for you. And kids strive to achieve one? God help ’em. Luis Enrique July 12, 2014 at 9:10 am Interesting. Shows how easy it is to screw up when you have data but no real knowledge of the industry it describes. I expect alex and Owen either to point to something Maya missed or issue a correction. ken July 12, 2014 at 10:20 am Luis Actually it shows that someone didnt master their data first. This is the key to empirical research. It is unfortunately quite common even amongst fairly well known academics. bloke (not) in spain July 12, 2014 at 2:08 pm @Luis & ken. You’re being too generous to them. It’s not just academics being careless. Didn’t they wonder about the coins in their own pockets? That they indeed have coins in their pockets? A $50Kg price for Cu would make them worth several times their face value. All the copper coinage would have been melted down for scrap. It’s an inability to see the blindingly obvious staring them in the face. Total disconnect from the real world. Luis Enrique July 12, 2014 at 4:36 pm you are kidding yourself if you think people connected to the real world can look at a wholesale price for some unit of copper cathode, whatever that is (I have no idea) and instantly see if it’s unrealistic. I bet not 1 in a thousand people could do that. ken July 12, 2014 at 4:52 pm B(n)is I work with empirical data and I’ve seen quite eminent academics make fools of themselves when they’ve not understood the data – usually theorists doing a bit of empirical work. It is all too easy to do. I do think that the CGD peeps should have checked the outflows in volume terms. Which would have highlighted the underlying problem. MyBurningEars July 12, 2014 at 5:38 pm @Luis Nowt wrong with not knowing what copper cathode is, and most people can get by quite happily without knowing how much it costs (I dislike it when politicians are harangued by journalists about the economics of milk – if they don’t know the price of a pint, so what?). But if you’re writing a report about it, it would behove you to get your head around what it is and what a ball-park price is, just to save egg on face. What ken says is true – to know how meaningful the prices were it would have been a simple and sensible step to check the volumes. They did have the data. bloke (not) in spain July 12, 2014 at 6:08 pm @luis I must be that one in a thousand. I hadn’t encountered the word “cathode” in connection with copper before. But it didn’t take 2 seconds to conclude, mentioned along with an ore price & the word “market” it’s likely to be a trade term for the refined metal. What else is it going to be? But I’m not one in a thousand. Or even one in ten. Just someone who’s a grasp on the principle, the materials we encounter in everyday life have to come from somewhere.& from the value of what they’re used in, a ball-park on their likely value. Ie the raw material can’t be more costly than the finished product. If that sort of deduction can’t be derived from a university education, what’s the point of one? Gareth July 12, 2014 at 6:29 pm Luis Enrique said: “you are kidding yourself if you think people connected to the real world can look at a wholesale price for some unit of copper cathode, whatever that is ” The chart alone is dead simple to interpret and I’m surprised anyone could get things so backwards. Zambia export prices to Switzerland are roughly in line with Zambia export prices to other places. Swiss export prices look immediately suspect by comparison. But the assumption was made that Swiss export prices were the ‘correct’ ones and that Zambia was being massively fleeced. bloke (not) in spain July 12, 2014 at 8:06 pm To return to this after a pause for thought: “I’ve seen quite eminent academics make fools of themselves when they’ve not understood…yadda, yadda” If they can’t hack the simple process outlined above, they should be out with Arnald flipping burgers where they can’t do the rest of us any lasting harm. And I don’t mean this as a humorous comment. Luis Enrique July 12, 2014 at 8:46 pm Yes I think the main error was not verifying what world prices really were. If you are working with a dataset with hundreds of elements you probably aren’t going to dig into each one to see where they came from, but you could obtain date on comodity world prices to check against bloke (not) in spain July 12, 2014 at 10:30 pm Luis Why the hell would they need to verify world prices? This isn’t Tim’s scandium. This is a common material we come across every day in our lives, in one form or another. Our pocket change is made from it FFS! Let’s try some simple arithmetic based on that. A two pence piece is about 5gm (it’s a bit more but it doesn’t matter) 100 – £2’s worth – is half a kilo £4’s worth weighs the same as a bag of sugar. Do you feel comfortable about the amounts, here? You’ve handled coins in more than ones & twos. You know what a bag of sugar is? (If you don’t work in £’s I can do the same thing in €’s. With ounces for that matter) So how does a bag of sugar’s weight of copper price at £30? It’s not just marginally adrift. We don’t have to worry about “maybe they alloy the coins” or ” I don’t know the exact weight of a 2p in grams” or the market price of Cu cathode. From just rough approximations We’re headed for a whole order of magnitude here. How often do we see this sort of thing? How do they do it? Robbo July 13, 2014 at 8:43 am @blokeinspain British “copper” coins have for years been made of steel with a copper surface wash, because the cost of the copper was getting close to the face value of the coin. You can easily verfiy the existence of the steel core with a magnet. Old coins do’t respond but new ones do. bloke (not) in spain July 13, 2014 at 10:44 am @Rollo There are times one makes a magnificent boo-boo. And this is one. Hangs head… MyBurningEars July 13, 2014 at 10:54 am @Luis The data set was huge but the supposed anomaly was largely due to just a few items – that’s usually a signal to investigate those in more depth rather than lining up malign motives as the cause by default. That task would have been much more manageable. Luis Enrique July 13, 2014 at 11:30 am Yep I was under impression multiple commodities used, so a world compodity prices dataset, of it exists, might have been a quick check for anomalies. MBE I did not question their motives, I happen to know these guys they are straight up types MyBurningEars July 13, 2014 at 12:30 pm Luis – sorry didn’t make myself clear. I’m sure they are perfectly decent folks! I meant that finding a few anomalous items (basically two major ones) should have been a trigger to investigate those data points in more detail, rather than to report that there was something fishy going on. Luis Enrique July 13, 2014 at 3:24 pm MBE. Ah, crossed wires. ThomasB July 14, 2014 at 1:01 am Luis Enrique said: “you are kidding yourself if you think people connected to the real world can look at a wholesale price for some unit of copper cathode, whatever that is ” People connected to the Internet can find this out in seconds. Try “Google.com”. Copper cathode grade A is about 7,000USD per tonne. It is 99.99% pure, to prevent a galvanic reaction when used as a cathode. If someone is going to make serious allegations they should spend at least 2 minutes checking their facts. Luis Enrique July 14, 2014 at 9:31 am Thomas B somebody making smart arse comments should at least spend 2 minutes reading what they are responding to. I’m with you on checking facts, that’s why I suggested cross checking against a world commodity prices dataset. I also did not suggest information about copper would be hard to find. I did say that most people wouldn’t know a figure for copper cathode pricing was obviously wrong WITHOUT looking it up. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.