A good sentence fragment

Nothing in Arrow predicts higher expenditures. In fact, it predicts fewer expenditures because markets will partially breakdown (not exist)

That is from Jeremy Horpedahl on Twitter.

Comments

Isn't it actually two full sentences?

Tyler is unable to compute them as separate when there's only a single space between the two.

Tyler is referring only to the second portion (the "sentence fragment").

Because it lacks a period?. It has a subject and a verb and even a subordinate clause!

They are each grammatical sentences, but the antecedent of "it" is vague.

If I recall Arrow (1963) correctly he talks about both adverse selection and moral hazard (not necessarily in those terms). With insurance markets unraveling due to adverse selection, that would probably cause expenditures to decrease. Moral hazard (in the form of the insured consuming more healthcare and doctor induced demand) would entail more spending. Admittedly, it's been a while since I read Arrow, but if these aren't in Arrow, they are certainly standard health econ concepts. Most of the theoretical results that people discuss tend to assume the same risk aversion across the population. I think it was Amy Finkelstein who has done some work (with others) to show that some of the differences in medical consumption has to do with differing levels of risk aversion and not information asymmetry. With that caveat, I think it's safe to say that the statement "Nothing in Arrow predicts higher expenditures" is probably false.

My immediate reaction as well. Even with adverse selection, the static analysis would be higher costs from selection of relatively unhealthy people into the pool. And It is very easy to see how unraveling might not happen if a government is willing to step in and mandate guarantees for per-existing conditions etc. So basically a nonsense statement.

That's higher costs per person, but not higher aggregate costs for society... that makes no sense. The question raised was about aggregate costs.

Adverse selection would most likely lower aggregate spending, but it seems moral hazard is likely to push up aggregate spending. So there are countervailing factors and the effect on aggregate spending is ambiguous.

I always thought the period was a sentence terminator, not a sentence separator.

The British call a period 'full stop.' No ambiguity there.

Got to have my daily BM time to read MR. Better than Exlax.

Is higher more lesser than fewer? Or is fewer less lower than higher?

Reason #74 to disregard pretty much everything (mis?)communicated via tweet

The problem is the word "breakdown," which is a noun. The correct term in this sentence would be "break down," two words.

king lear is a helluva of play

Laertes is a helluva a character
Cocaine is a helluva a drug

Polonius says something is rotten in Denmark. Norway has fallen. Hamlet will rise from his crib.

Snipped up jeans is a king lear fallacy. Plastic glasses is a no lunch fallacy. Did Hamlet rise from his crib? Has the age of butterfly's been eclipsed by the age of lizardry?

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