No Pain Relief for Tort Sufferers
James Hamilton takes a look at one of the key studies on Vioxx and heart attacks. He is not greatly impressed.
I took a look at one of the studies on which the decision was
justified, written by Dr. David Graham and co-authors and published in Lancet
in February. This study looked at 8,143 Kaiser Permanente patients who
had suffered a heart attack and had also at some point taken a
nonsteroidal anti-inflammatory drug (NSAID), of which Vioxx (rofecoxib)
is one. Of these patients, 68 were taking rofecoxib while 4,658 were
receiving no medication at the time of their heart attack, a ratio of
(68/4658) = 1.46%. For comparison, the study looked at 31,496 other
patients who had also at some point taken an NSAID, matched for
characteristics like age and gender with the first group, but who
didn’t have a heart attack. The ratio of rofecoxib users to those with
no current medication was slightly lower (1.05%) in this second group,
which one might summarize as a (1.46/1.05) = 1.39-fold increase risk of
heart attack from taking rofecoxib compared to no NSAID. Is that
statistically significant, in other words, can you rule out that you’d
see a difference of that size just by chance? Yes, the study claimed,
but just barely.On the other hand, this was not a controlled experiment, in which
you give the rofecoxib randomly to some patients and not others in
order to see what happens. Rather, something about either these
patients or their doctors led some of them to be using rofecoxib and
others not. Dr. Graham and co-authors looked at a variety of indicators
that suggested that the rofecoxib patients already had slightly
elevated risk factors for coronary heart disease. Once they controlled
for these with a logistic regression, their study found an elevated
risk factor of heart attack for rofecoxib takers of 1.34, which was not
statistically significantly distinguishable from 1.0.The strongest evidence from this study was a claimed dose-effect
relation. Of these 68 rofecoxib-using heart-attack patients, 10 of them
were taking doses above 25 mg per day. Only 8 patients in the much
larger control group were taking so high a dose, implying an elevated
risk factor of 5 to 1 for high-dose patients. Again observable risk
factors could explain some of this, with the conditional logistic
regression analysis bringing the implied drug-induced risk down to 3 to
1. According to the study, this elevated risk factor was still
statistically significant, even though the inference is based on the
experience of just 10 patients.The obvious question here is whether in fact the authors were able
to observe all the relevant risk factors. The study openly acknowledged
that it did not, missing such important information as smoking and
family history of myocardial infarction.…[E]ven if
there actually is an elevated risk of the magnitude the studies suggest
but can’t prove, the question is whether I might want to accept a 1 in 4,000 risk of dying from a heart attack in order to get the only medication timt makes my pain bearable and a mobile life livable. And if I say no to the Vioxx, I may end up taking something that is less effective for my pain but has risks of its own.…. How did we arrive at a
system in which 12 random Texans are assigned responsibility for
evaluating the scientific merits of statistical evidence of this type,
weighing the costs and benefits, and potentially sending a productive blue-chip American company into bankruptcy protection?
See also my op-ed Bringing the Consumer Revolution to the FDA.
Not since Mark Twain
Jon Stewart destroyed Christopher Hitchens on Friday’s Daily Show. Hitchens tried to take the line that people against the war in Iraq were capitulationist, blame America-firsters. Here’s part of the transcript:
Stewart: The people who say we shouldn’t fight in Iraq
aren’t saying it’s our fault. That is the conflation that is the
most disturbing to me.
Hitch: Don’t you hear people saying that we made them nasty. . .
Stewart: I hear people saying a lot of stupid
[bleep]. . . But there is reasonable dissent in this country
about the way this war has been conducted, that has nothing to do with
people believing that we should cut and run from the terrorists, or that we
should show weakness in the face of terrorism, or that we believe that
we have in some way brought this upon ourselves. They believe that this war is being conducted without transparency, without credibility, and without competence…
Hitch: I’m sorry, sunshine. I just watched you ridicule the president for saying he wouldn’t give a timetable…
Stewart: No, you misunderstood why. . . .What I ridiculed the president [about] was [that] he refuses to answer questions from
adults as though we were adults and falls back upon platitudes and
phrases and talking points; that does a disservice to the goals that he
himself shares with the very people he himself needs to convince.
Hitchens knows he has been beat and can hardly wait to escape at the close (watch the video here).
The Virtues of Judicial Independence
I worry when conservatives rail against out-of-control judges. Who else but an independent judge can smack-down out-of-control bureaucrats and politicians like this?
Econometric Society 2005 World Congress
Mahalanobis covers some of the latest papers from the Econometric Society meetings. Here is a selection, more summaries at the previous link and much more here.
Economists
find money is more precious than time: They say that time is more precious
than money but economists have shown that this isn’t the case. Researchers
presented a paper that shows people are more willing to share the fruits of
their labour rather than their money.Legalising
abortion increases a woman’s economic power: The legalisation of abortion
and innovations in birth control have increased a wife’s clout in the home.
Results show that all women are better off, including those who don’t use birth
control, but only if it’s available to single women as well.Model
predicts how to get ahead in the research stakes: The conundrum over whether
to share interim research results or play your cards close to your chest has
been answered.Younger
siblings fare worse in educational attainment: Children born later in
families don’t perform as well as their older siblings.
No Prisoner’s Dilemma on the Western Front
Robert Axelrod’s story of how cooperation developed between British and German soldiers in the trench warfare of World War I is so elegant few people have questioned it. Yet in a single sentence, Andrew Gelman says the emperor has no clothes and looky, looky, he’s right!
The crux of Axelrod’s story is that the soldiers were trapped in a prisoner’s dilemma: individual incentives were to shoot the enemy while the socially optimal outcome was cooperation. Axelrod then introduces his famous ideas of tit for tat etc. etc. to explain how cooperation could evolve even under these most hostile of conditions.
But Gelman asks why should we think that shooting the enemy was in a soldier’s best interest? Indeed,
…it seems more reasonable to
suppose that, as a soldier in the trenches, you would do better to avoid firing: shooting
your weapon exposes yourself as a possible target, and the enemy soldiers might
very well shoot back at where your shot came from.
I believe that on this point Gelman is totally correct [insert dope slap here]. But, as he continues, "If you have no
short-term motivation to fire, then cooperation is completely natural and
requires no special explanation."
Axelrod’s story and the large literature following it sometimes suggest that cooperation is always the thing to be explained. Cooperation is what happens when the natural order is overcome. Gelman reminds us that sometimes cooperation is the norm, it’s conflict that needs to be explained. In this case, we need to explain why the soldiers fought.
Comments are open.
Modern Germs
Guns, Germs, and Steel emphasized the role that germs played in the clash of civilizations of the early modern period, say up to about 1700. I was surprised to learn from John M. Barry’s excellent book The Great Influenza that germs continued to have a disproprtionate influence on the civilizations well into the twentieth century and perhaps even today.
The great influenza of 1918 probably killed 100 million people, about five percent of the entire world’s population. An even higher percentage of young people died and most shockingly all of this occured in about 12 weeks. Death was not evenly distributed:
The Western world suffered the least, not because its medicine was so advanced but because urbanization had exposed its population to influenza viruses so immune systems were not naked to it. In the United States, roughly 0.65 percent of the total population died, with roughly double that percentage of young adults killed. Of developed countries, Italy suffered the worst, losing approximately 1 percent of its total population….
The virus simply ravaged the less developed world. In Mexico the most conservative estimate of the death toll was 2.3 percent of the entire population, and other reasonable estimates put the death toll over 4 percent. That means between 5 and 9 percent of all young adults died.
In even more remote areas the death toll was much higher. One doctor visiting Inuit in Alaska found everyone dead in 3 villages and 7 other villages with a death toll of 85%. We don’t know how many people died in India and China but the rates were certainly higher than in the more urban United States.
By the way, an enterprising researcher should be able to make use of the 1918 influenza in Mexico (and elsewhere as well) as a shock to population that likely had important reverbations throughout the economy and society for decades.
Addendum: Bill Johnson at UVA points me to, Is the 1918 Influenza Pandemic Over? (NBER), a very recent paper by Douglas Almond. From the abstract:
In the 1960-1980 Decennial U.S. Census data, cohorts in utero during the height of the Pandemic typically display reduced educational attainment, increased rates of physical disability, lower income, lower socioeconomic status, as well as accelerated adult mortality compared with other birth cohorts. In addition, persons born in states with more severe exposure to the Pandemic experienced worse outcomes than those born in states with less severe Pandemic exposures. These results demonstrate that investments aimed at improving fetal health can have substantial long-term effects on subsequent health and economic outcomes.
Now consider, if the effects in the United States are large then in Mexico, not to mention India and China (where data will be much harder to gather), the effects could have been devastating on a macro scale.
Bubbles and the real price of housing
Robert Shiller has put together the first, long, true index of home prices. By true I mean that as much as possible it looks at repeated sales of the same or very similar houses over time. Conventional indices confuse changes in size and quality with changes in the price of housing per se.
What the index shows is that real house prices have remained stable over the past 100 years. The contrary impression is driven by inflation and as noted above, changes in what is being measured. Stability, however, is what we should expect. The United States remains a relatively unpopulated country. When house prices in current population centers increase, suburbs and smaller cities expand. People move to less populated areas and in so doing alleviate the press on house prices. In the long run, the supply of housing is very elastic.
The glaring exception to stability is the last 6 or 7 years when house prices have skyrocketed far beyond where they have ever been before. Can you hear the pop coming?
Graphic from the NYTimes (click to open in new window).
Not putting their money where their mouths are
Inspired by Robin Hanson’s work on betting markets, James Annan, a climate scientist, has been trying to get skeptics of global warming to put up or shut up, mostly with no success on either front. A number of prominent skeptics refused to bet (perhaps having learnt from Paul Ehrlich’s embarassment) or offered to bet only at very high odds in their favor (i.e. implicitly admitting that they thought the probability of global warming was high). The failure to bet is telling and a nice reminder that even markets with no trades can tell you things of importance!
Finally, however, Annan has found some takers. From Nature (subs. required):
James Annan, who is based at the Japan Agency for Marine-Earth Science and Technology in Yokohama, has agreed a US$10,000 bet with Galina Mashnich and Vladimir Bashkirtsev, two solar physicists who argue that global temperatures are driven by changes in the Sun’s activity and will fall over the next decade. The bet, which both sides say they are willing to formalize in a legal document, came after other climate sceptics refused to wager money…
Both sides have agreed to compare the average global surface temperature between 1998 and 2003 with that between 2012 and 2017, as defined by the records of the US National Climatic Data Center. If the temperature drops, Annan will pay Mashnich and Bashkirtsev $10,000 in 2018, with the same sum going the other way if the temperature rises.
I hope that a TradeScience market like TradeSports can be established to make such bets more routine and even more informative.
Waste and the Value of Time
Concerning yesterday’s post, Beware Free Apples, a number of people wrote to me along the following lines, "some people have a low value of time, these people will be the ones who will be attracted to the giveaway so the time spent waiting in line is not as wasteful as you suggest." Surprisingly, this plausible analysis is not correct or at least seriously incomplete.
To see why suppose that the giveaway were held in a poor country. Would the waste be any less? No. Everyone in line would have a low value of time but for precisely this reason the waiting time would increase and the total waste would not change.
So long as there are more people with a low value of time than there are iBooks the waste will be complete. What does make a difference is diversity. If there are a few low value people and lots of high value people then the low value people can earn a rent. A direct analogy is to gold mines. If there are a lot of low cost gold mines then the price of gold is low and none earn a rent. If there are just a few low cost gold mines and many high cost gold mines then the price of gold will be high; the marginal mine will just break even and the low cost mines will earn a rent. To earn a rent there must be a scarcity – scarce land, scarce mines, or scarce low time-value people.
Suppose that we have a continuum of high to low-value types. We can say immediately that "The total price for the marginal consumer will tend to rise so that it equals the marginal value of the good." In other words, the marginal consumer will do only slightly better than if he were to buy the good at the market price (if he were to do much better then by continuity there is another consumer willing to outbid him by waiting in line a bit longer.) Thus on the margin dissipation is complete. What about the infra-marginal consumers?
The infra-marginal consumers will earn a rent but given some plausible assumptions about the distribution of types it’s surprising how little difference this makes to total dissipation. I did some very basic calculations in Mathematica assuming that the value of time is Normally distributed with mean $15 and sd $4. Under these assumptions the "first" person in line has a value of time of only $.84 per hour. Nevertheless, the total rent dissipation is 80 percent of what it would be if everyone had a value of time of $11.63, the value of time of the marginal consumer. Some brief experiments suggest that this sort of result if quite robust. Specifics will depend on the exact distribution assumed. Here is a pdf
and here is the Mathematica Notebook if anyone wants to generalize.
Beware Free Apples
You can get rid of the market but you can never get rid of competition. Goods not allocated by market prices have to be allocated somehow and so long as goods are scarce there will be competition to obtain them, if not by outbidding competing buyers with money then by outbidding them in time spent waiting in line, doing political favors or some other method.
What happened in Henrico county is the same type of thing that happens when there is a price control. The diagram below explains.
At the controlled price the quantity demanded exceeds the quantity supplied so buyers compete to obtain the good by, for example, arriving early and standing in line (or stomping on their competitors!). Waiting in line is costly so the total price rises above the money price by the time price. The total price for the marginal consumer will tend to rise so that it equals the marginal value of the good – only when the total price is equal to the marginal value (at the controlled quantity) is there no excess demand.
It’s very important to notice that that the shop owner gets your money but does not get your time. Thus, money expenditures are a transfer but time expenditures are a waste. Money expenditures = controlled price times*controlled quantity. Time expenditures = time price*controlled quantity so the shaded area indicates the waste.
It’s also important to notice that the total price is higher than the market price! A price control, therefore, doesn’t even necessarily reduce prices!
Evil Kelo
The Kelo v. New London eminent domain case started five years ago when New London condemned a number of buildings, including the lifelong home of one 87 year old resident. The residents took the case to court and, of course, lost. Now get this. The city is claiming that since the original seizure was legal the residents have been living on city property for five years and thus owe back rent.
Namesake Susette Kelo, who owns a single-family house with her husband,
learned she would owe in the ballpark of 57 grand. "I’d leave here
broke," says Kelo. "I wouldn’t have a home or any money to get one. I
could probably get a large-size refrigerator box and live under the
bridge."
Thanks to David Theroux for the pointer.
The Dragon Illusion
If you liked the chessboard you will also enjoy the Dragon Illusion. A video at the link shows you what the illusion looks like but it’s more fun to make a dragon for yourself using the PDF (provided at the link) and some scissors and tape. You will be amazed!
Thanks to Mitch Berkson for the link.
Outsourcing Blogs
Our general business model is a two tiered effort to hire Chinese
citizens to write blogs en masse for us at a valued wage. …We estimate that our current blogforce
of 25 can support around 500 unrelated blogs…When a vendor
needs to promote a new product to the internet demographic we will be
able to create a believable buzz across hundreds of ‘reputable’ blogs
and countless message boards. We can offer a legitimacy to advertisers
that doesen’t exist anywhere else.The second tier of our plan
is a blog vacation service where our employees fill in for established
bloggers who need to take a break from regular posting. As all bloggers
know, an unupdated blog is quickly forgotten. For a nominal fee we can
provide seamless integration of filler.
So far the enterprise is nothing more than a blog about starting the business. But it does make for some amusing reading.
Our initial results have been a little bit below what we expected.
To increase our authenticity we are trying to isolate and remedy
problem groups. Our design process centers around 3 general groups.
They are:1. Teenage girls
2. Normal Bloggers (yuppies, moms, average college students)
3. Super Bloggers (bipolars, cynics, liberals, outcasts, super-hip)
Teenage girls are apparently the easiest for Chinese sweat-shop workers to imitate but Super Bloggers are tough. The entrepreneurs, however, have uncovered the formula:
To create convincing Group 3 product we need to have extensive
faux-archives (to give the illusion of a faithfully updated blog) and
we need to drop a lot of obscure pop-culture references. The key to
good Group 3 is to spend 80% being negative about certain areas of
culture and 15% excessively positive. The last 5% should be used for
self-loathing because the blogger likes certain ‘un-hip’ culture.
Yup, he got the percentages just about right.
Thanks to Noel Welsh, who claims he blogs at Untyping.
Against Intuition II
Against Intuition
Larry Temkin, the noted philosopher, was trying to convince Robin Hanson and I that some moral values should not be traded. He posed the following question:
Suppose that you had a million children and you could give each of them a better life but only if one of them had a very, very terrible life. Would you do it?
"Of course," I answered. "You would be crazy not to," said Robin. I could tell by the look on Larry’s face that this was not the answer that he had expected. "But, but," he stammered, "almost all philosophers would tell you that that is wrong." "So much the worse for almost all philosophers," I replied.
My response to Tyler’s post on animal welfare is similar. Tyler wants to find a theory that both rationalizes and is consistent with our intuitions. But that is a fool’s game. Our intuitions are inconsistent. Our moral intuitions are heuristics produced by blind evolution operating in a world totally different than our own. Why would we expect them to be consistent? Our intuitions provide no more guidance to sound ethics than our tastes provide guidance to sound nutrition. (Which is to say, they are not without function but don’t expect to be healthy on a yummy diet of sugar and fat.)
The reason to think deeply about ethical matters is the same reason we should think deeply about nutrition – so that we can overcome our intuitions. Tyler argues that we don’t have a good approach to animal welfare only because he is not willing to give up on intuition.
Tyler asks (I paraphrase) ‘Would you kill your good friend for the lives of a million cats? What about a billion cats?’ He answers, No, but says "Yet I still wish to count cats for something positive."
My answer is not only Yes it is that we do this routinely today. The introduction of "your good friend" (or "children" in Larry’s example) engages our primitive intuitions and feelings and that is why Tyler’s answer goes awry. But consider, last year Americans spent more than 34 billion dollars on their pets. That money could have saved human lives had it gone to starving Africans.
Similarly, contra Larry, we do make tradeoffs concerning our children and more generally we accept that some people, such as coal miners, risk a much worse life, i.e. death, in order to benefit everyone else just a little bit.
The dilemmas that Larry and Tyler raise tell us that our intuitions,
taken as a package, are not rationally derivable from a handful of
premises. But that is no reason to abandon reason instead we should
happily accept that some of intuitions lead us astray.
A sound mind and a sound body both require that we abandon our gut instincts.