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Author's Name: David Butler
Date: Tue 12 Feb 2019

David Butler

Professor David Butler (past panellist)

David Butler studied for his Bachelors and Masters degrees at the University of York, UK, and obtained his PhD from UWA. He has previously taught at UWA and the University of Arizona. His research interests are in experimental economics, decision theory and behavioural game theory. He is a former President of the WA branch of the Australian Economic Society.

He has made a significant research contribution by using experimental methods to investigate economic assumptions regarding choice under risk. He is also known for integrating methods used in disciplines such as experimental psychology, decision theory and even philosophy into experimental economics research, particularly regarding choice under risk but also behavioural games. He is known for integrating decision process measures and ‘affect’ into economic models of individual decision behaviour under risk and in strategic games, as well as cognitive constraints on reasoning.

Subject Area Expertise

Experimental economics, behavioural game theory and decision theory.

Website:

http://profiles.murdoch.edu.au/myprofile/david-butler/


Responses (18)


Robots, artificial intelligence and the 'future of work' - October 2017

Poll 23

Question A: "Holding labor market institutions and job training fixed, rising use of robots and artificial intelligence is likely to increase substantially the number of workers in Australia who are unemployed for long periods."

Question B: "Rising use of robots and artificial intelligence in Australia is likely to create benefits large enough that they could be used to compensate those workers who are substantially negatively affected for their lost wages."

 

A - Agree

B Agree

I recommend the following short ‘duel’ where the main points are debated nicely:
https://www.mruniversity.com/courses/econ-duel/will-robots-take-our-jobs


Does privatisation of human services hurt outcomes? - July 2017

Poll 20

"For-profit provision of human services like health and education leads to poor client outcomes and high costs to government."

 

Uncertain (neither agree nor disagree)

6

Much non-Government provision of health care and education is not really for-profit. Private schools are likely at least as good as state schools and HBF, BUPA etc don't obviously lead to worse outcomes in health care, for members or non-members. Taking the question literally, we have little for-profit provision as I understand it in Australia so I don't know what evidence there is for or against. If we did, my guess is the provision would be decent for those who purchased it (if they want to stay in business in the long term) but also expensive and with much greater inequality in consumption. If Government then stepped in to purchase on behalf of those without, costs would likely be higher than at present. The US is the obvious example.


Australian Federal Budget 2017 - Outsourcing Economic Forecasting - May 2017

Poll 18

"Given the Commonwealth Treasury?s ongoing difficulty in making accurate forecasts of some of the key economic variables underpinning the Budget ? in particular nominal GDP growth ? the Government should ?outsource? the economic forecasts used in framing the Budget to an independent agency (such as the Parliamentary Budget Office), as now happens in the United Kingdom."

 

Agree

7

I suspect uncertainty in such forecasts is a fact of reality. But if there is any evidence an outside agency could do a better job then I wouldn't have a problem with it.


Energy shortages - reserving Australian gas - April 2017

Poll 17

"In response to energy shortages around Australia, government policies requiring gas producers to reserve some production for domestic consumption are a good way to ensure that Australian consumers have access to sufficient gas supplies while still allowing for gas exports."

 

Agree

4

While my instinct is to disagree, we have had this policy in WA for a number of years and we have not suffered the supply problems currently afflicting the Eastern States. I have no deep knowledge of this policy area however.


Economics teaching - micro before macro - February 2017

Poll 15

"It is more effective to teach an introductory course in micro-economics first before an introductory course in macro-economics."

 

Strongly agree

7

I believe macroeconomic explanations are easier to follow if students have already been introduced to the economic way of reasoning about how decisions are made. Otherwise the assumptions behind rational expectations or long run model of economic growth might seem to be arbitrary.


2016 US Election - November 2016

Poll 13

"Hillary Clinton is likely to be the superior US presidential candidate for the Australian economy and for Australia."

 

Strongly agree

8

My strong agreement reflects vehement opposition to the republican nominee more than it reflects vehement agreement with the democratic nominee.


Social costs of gambling - December 2016

Poll 14

"The social costs of gambling exceed the benefits (including consumer surplus from recreational gambling and tax revenue for governments)."

 

Uncertain (neither agree nor disagree)

7

For the great majority, no, the benefits exceed any social costs as with most past times. But for a small minority the costs, private and then social, far exceed the benefits. I don't find the Becker-Murphy 'rational addiction' model a particularly useful guide for public policy.


Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.' Part 2: 'It is unethical for governments to use behavioural economics to

The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy.

 

Strongly agree

9


Immigration - November 2016

Poll 12

'The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy'.

 

Uncertain (neither agree nor disagree)

5

Depends in part on who the migrants are: skilled or unskilled and so on. Also may depend where they locate: inner cities or regional towns. Too rapid an influx can put a lot of pressure or congestion on services in particular areas. But done sensibly the overall impact should be positive.


Behavioural economics - September 2016

Poll 11

Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.'

Part 2: 'It is unethical for governments to use behavioural economics to "nudge" citizens.'

 

PART 1 - Disagree

8

There is always a context for a decision, choice architecture can't be avoided, so why not choose a useful one. Consumers are already being nudged by business in how choices are framed and products marketed, quite possibly to their detriment, they just may not realise it. A nudge in the other direction could perhaps level the playing field.

PART 2 - Disagree

8

There is always a context for a decision, choice architecture can't be avoided, so why not choose a useful one. Consumers are already being nudged by business in how choices are framed and products marketed, quite possibly to their detriment, they just may not realise it. A nudge in the other direction could perhaps level the playing field.


RBA economic growth targets - August 2016

Poll 10

"The Reserve Bank of Australia should be tasked with targeting nominal economic growth rather than inflation."

 

Agree

6


The Brexit - impact on UK citizens - July 2016

Poll 9

"Assuming it is implemented, Brexit will deliver net economic benefits, on average, to UK citizens within its first 5 years."

 

Agree

5

The risks are many, but as it is the new reality I prefer here to look for the positives it may offer. The pound will fall to make UK exports more competitive. Wealth inequality will diminish as the share market declines. Housing, particularly in London, will become more affordable as prices fall, a major issue in recent years. The U.K. will save many billions of pounds, net, each year from not paying into the EU budget, if they do not seek to stay in the single market.    The worst case scenario for UK exports without the single market is reliance on WTO rules for trade with the EU, not really a disaster. But given the major deficit the UK runs with the EU, it is likely a more advantageous arrangement will be reached, pushed by Germany and other net exporters to the UK.    Relief from anti-competitive EU rules will permit more market-based responses by the UK, both by producers and in government policy making. Already a reduction in company tax to 15% to forestall any company departures has been mooted, which the EU's tax harmonisation policy would not permit otherwise. Other competitive policy responses on taxation, regulation and elsewhere also will become possible. Food prices prices are expected to decline, without the constraints of the common agricultural policy, raising living standards for consumers. Much depends on the response of the 27 other EU countries. But as the UK is the 5th or 6th biggest world economy, any 'boycott' or sanctions for snubbing the 'club' would impose significant costs on the 'snubbers', not least Germany. Once the emotion of the present months dies down, I doubt such responses will prevail. The shape of new agreements are as yet unknown. Will the UK spearhead new trade alliances, without the political goals the EU has for its members? Might the UK, Switzerland, Canada, Singapore, Australia, NZ, Chile, South Korea for example form a rival, non-regional single market? Will the EU break up anyway due to the north-south tensions of the Eurozone? Will the EU become more statist and less competitive, in future?    I don't know, but I'm not particularly pessimistic for the UK economy 5+ years from now, relative to the rest of Europe.


Budget 2016-17 - Returning to surplus - May 2016

Poll 7

"The recently released 2016-17 Commonwealth Budget projects that the Australian Government's underlying cash balance will return to surplus by 2020?21*. Australian politicians should rebalance the budget with greater urgency."

 

Disagree

8

It also depends on why we have a deficit; if due to improving infrastructure, improving incentives for productivity or work it is not much of an issue. It is also a cheap time for Government to borrow for these investments. If we were in a boom as ten years ago I'd be keener on balancing the budget.


Efficiency of tax Government investments in major sporting events - February/March 2016

Poll 5

"Government investments in major sporting events usually generate net benefits for the city or region where the investment is made."

 

Uncertain (neither agree nor disagree)

7

I'm not familiar with the evidence other than hosting the summer Olympics. Some cities probably had net benefits, Barcelona, Sydney, even London, but others did not. So probably a mixed bag.


Efficiency of tax incentives - February 2016

Poll 4

"New tax incentives for investments in technology and innovation businesses and start-ups are likely to be inefficient."

 

Disagree

6


Bah Humbug Australia - December 2015

Poll 3

"Giving specific presents as holiday gifts is inefficient, because recipients could satisfy their preferences much better with cash."

 

Disagree

5

It is true that a person may wish they'd been given cash rather than say Barry Manilow's Greatest Hits, but a bigger part of the equation is that someone went to the trouble of finding you a gift, even if they didn't hit the nail on the head with this years offering. I would rather receive almost any gift than its cash equivalent even when the gift misses the mark. As such, I don't believe it is inefficient and can continue to enjoy the anticipation that next year the parcel under my tree will contain a Taylor Swift DVD.


Penalty Rates Reform - November 2015

Poll 2

"Aligning Sunday penalty rates for hospitality, entertainment and retailing industries with the current levels for Saturday, as proposed in the Productivity Commission's draft report, will lead to more employment and greater availability of services in these industries on Sundays."

 

Agree

7