Bias vs. predictability

In fields less ideologically charged than economics, it is normal and
useful to do an investigation with a good idea what you will find. It
doesn’t excuse letting overconfidence in your worldview blind you to

surprises, but I that doesn’t seem to me to be a major problem in the
sciences like chemistry and physics. (In biology and psychology, see
snipe below.)

Consider setting up an astronomical observation tonight. You have a
pretty good idea that the sun will not be out there: you may prepare
sensitive photographic instruments, or even stare through your
binoculars, without taking precautions that you could be physically
blinded by the surprise of your model being wrong.

This doesn’t excuse setting up an experiment where you don’t control
for something that you should’ve controlled for. If Cowen’s study
starts with such certain knowledge that only developed countries
contribute to medical innovation that he simply doesn’t measure any
others, he’s open to very serious criticism. On the other hand, in
practice he needs to cut off his investigation somewhere: he’s
probably not going to investigate the possibility that medical
innovation is in fact driven by time travellers from the sunken
civilization of Atlantis. As long as he guesses right about what can
be correctly excluded he’s fine. If he makes a defensible wrong guess
(perhaps like Lord Kelvin ruling out natural selection because he
could calculate the Sun would’ve burned out too fast to allow its
timescale) he could be OK too. But he should avoid refusing to control
for a hypothesis because he “knows it’s wrong” with such certainty
that it’s valid to ignore it when in reality he just dislikes it or
its proponents. See, e.g., people designing studies of the influence
of parents on their children’s behavior and not controlling for the
possibility of genetic inheritance of behavior.

For the record, I am a he. The “s” in my name refers to my last name, not a mis-typed “a.”

I left that comment for the reasons mentioned above and for others. I read this blog and tell all my friends and family to do the same because I often come across interesting ideas that aren’t the usual libertarian rhetoric. I expect more and usually I get it.

Health care, however, is politically charged and thus I am wary, yet not wholly without hope, that your paper will celebrate American innovations and denigrate or ignore successes of nationalized systems. Libertarians especially have a vested interest in selling nationalized health care systems short. I hope your paper isn’t obvious in these respects and is truly an effort to understand what drives health care innovations.

It seems that we have a group of pro-collectivism-in-medicine folks who are worried because their own prior beliefs are that the less-collectivist US system is far more innovative overall. These prior beliefs do them credit, for they suggest that common sense has not deserted them, but their concern that the result will favor the US does them little credit.

It’s pretty reasonable to suppose that innovation in the US is biased in various directions because of the payment system. So you’d expect cheap treatments using existing generic drugs to be less pursued by pharmaceutical companies and medical device companies, relative to things that are easier to cash in on. But for any sort of capital-intensive innovation, it probably doesn’t take much more than a back-of-the-envelope calculation to show that ROI by launching in the US is going to be significantly higher.

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