If we took seriously the dozens of reports tallying the alleged costs of every social ill, the world would seem a pretty depressing place.

I would be surprised if the sum of high-end costs reported in studies into alcohol abuse, obesity, incontinence and mental illness were much less than annual GDP. But most of the headline costs announced in these reports are utter nonsense, designed only to draw attention to some issue and build support for policy action. Very few of them are designed to give any real or reliable figure.

This week a study from Massey University claimed that the external costs of dairying – that is, the costs of dairy farming to people other than the farmers – are roughly on par with total dairy export earnings. One of the study’s authors was quoted in the New Zealand Herald saying that dairying “is a zero-sum gain for New Zealand if the costs are included”. But is that really the case?

The Herald’s Jaime Morton sent me a copy of the paper and asked for comment. The study estimated a $10 billion cost to remove all excess nitrogen leached from dairy farms to ensure all water remains suitable for human consumption.

While this could perhaps be a potential cost sometime in future if nitrogen leaching did not slow and if every water source in the country were needed for human consumption, neither of those seem a plausible basis for reckoning a $10 billion current cost of dairying. It also ignores measures already in place to abate nutrient leaching, ranging from improved on-farm pastoral processes and voluntary codes of conduct through to Lake Taupo’s nutrient-management regime.

The paper further tallied $3 billion in greenhouse gas costs, with no consideration of the emissions that would result from alternative uses of dairy land or from shifts of dairy production from New Zealand pastures to overseas-style intensive barn-based farming systems. That hardly helps in policy evaluation.

Finally, the paper included over half a billion dollars in purported costs of soil compaction in over-stocked pastures. Costs which fall on the farmer rather than the general public should never be included in a measure of external costs.

At least the New Zealand Herald asked a few economists for comment, and we roundly criticised the study. Other outlets, including Xinhua, mostly reported on Massey’s press release.

Be careful with social cost studies trumpeting big, big numbers. While they make for great media soundbites, their foundations are often shaky.