Category Archives: Health economics

Will the pseudoephedrine ban reduce P availability?

Posted on by

Oregon made pseudoephedrine-based cold medicines prescription-only back in 2006. A new report on the effectiveness in reducing the availability of P concludes:

Oregon’s experience with methamphetamine manufacture and abuse since 2006 does not stand out from its neighbors or other parts of the United States. This potentially calls into question whether Oregon’s Rx-only law had any independent effect on these key measures. Moreover, this law does come at some cost to consumers and government and private payers.

So the ban on selling effective cold medicine over the counter had no observable effect upon the P problem, but does cause inconvenience for people with a cold. It will be interesting to see comparable studies for New Zealand in a few years time, although the lack of neighbouring states makes it harder to find control groups to compare with.

Spirit level: A more fundamental concern

Posted on by

I agree with Dim Post that the choice of countries to add to the choice of countries made in the Spirit Level is a bit arbitrary (although I think Not PC and Kiwiblog also have a point regarding how sensitive the regression results are to the choice of countries that aren’t strictly the largest outliers in the sample) – but I still think that this particular “regression” is a steaming pile of unmentionables.

Lets ignore the fact that the slope of the  “regression line” appears very sensitive to the addition of a few countries.  Lets instead focus on the fact that it is a poor regression and that there isn’t a clear “theoretical background for causation”.

Continue Reading →

Government fail(ure)

Posted on by

Seriously, why the hell did we ban pseudoephedrine in New Zealand?  Has it had any impact on the “external costs of P”?

I know it has had a serious impact on me during this years flu season – given that all the alternatives suck.  And I know a lot of people who feel the same.

Dumb policy with a very obvious and high cost and pretty much no benefit.  What is this!  How does this rubbish get passed.

Drink heavily tonight

Posted on by

Because it makes you smarter:

(Source Marginal Revolution)

Note: I am joking, this is not causality.  For one we don’t have a quantity measure of drinking, and the impact of drinking on intelligence is no doubt non-linear.  In fact, you could make the argument that “smarter” people know how control their own alcohol consumption, and so do not face the severe negative impacts of drinking – in a way smart people are more likely to find ways to control, or are not subject to, time inconsistency problems in liqour.

However, I think we should also use this as a reminder that it the link between the consumption of a drug and the drugs impact can be very poorly estimated if we aren’t very careful to control for these sorts of issues – hence why I do not trust a lot of studies out there, especially the ones made by interest groups where all they do is draw lines (95% of studies according to my casual observation).

Update:  CPW sent me the link to the full set of graphs with alcohol involved – it is beautiful.

Universal healthcare and superannuation, and the cost of thinking ahead

Posted on by

If doing actions that reward a future self is perceived as costly could we justify these actions.  If thinking about our wealth, human capital, or ability to live in 10 years time is inconceivable, will me over consume now?

In essence this sort of discussion is saying that we discount our future selves TOO steeply (compared to whatever the underlying presumption of a “fair discount factor” is).  Is this a fair value judgment to make in policy?  It is not one I would make, but it appears to be the basis of some overaching policies such as universal healthcare and superannuation.

In this case, we don’t need to worry about a “moral hazard problem” even though (empirically) the actions of moral hazard will appear.  Why?  Because the actors aren’t thinking about the future selves and so these “inefficient” outcomes would have occurred in the first place!  Policy helps to correct this by transfering resources to our future selves to improve outcomes relative to the REAL counterfactual (rather than the idealized one where agents choose on the basis of our subjectively fair discount rate).

I think it is important to keep this issue in mind, because it is a closet behavioural assumption behind most policy.  If we buy this value judgment, then we will believe in a larger role for government then if we didn’t.

GST and food. Why I’m against exempting the tax

Posted on by

Via Dim Post, No Right Turn mentions an article from Werewolf.co.nz by Gordon Campbell.  The article supports the idea of exempting GST on food. There were a number of interesting facts, I definitely enjoyed the articles.

However, even if all the premises are correct and even given significant social justice goals, I think we have to be clear regarding why we think an exemption is the way to go – and in the end I still disagree regarding any exemption.

Continue Reading →