Underlying factors: conscientiousness edition

Linda Gottfredson shows that IQ perhaps explains a lot of the income-health gradient. If income and IQ are correlated, and if some minimal baseline cognitive capacity is needed to follow a doctor's orders (like scheduling multiple near-conflicting prescription schedules, for example), then we'd expect an income-health gradient even if there were zero direct effect of income on health.

While intelligence is important, so too is personality. And a new metastudy suggests that conscientiousness is particularly important. The abstract:

Personality may influence the risk of death, but the evidence remains inconsistent. We examined associations between personality traits of the five-factor model (extraversion, neuroticism, agreeableness, conscientiousness, and openness to experience) and the risk of death from all causes through individual-participant meta-analysis of 76,150 participants from 7 cohorts (the British Household Panel Survey, 2006-2009; the German Socio-Economic Panel Study, 2005-2010; the Household, Income and Labour Dynamics in Australia Survey, 2006-2010; the US Health and Retirement Study, 2006-2010; the Midlife in the United States Study, 1995-2004; and the Wisconsin Longitudinal Study's graduate and sibling samples, 1993-2009). During 444,770 person-years at risk, 3,947 participants (54.4% women) died (mean age at baseline = 50.9 years; mean follow-up = 5.9 years). Only low conscientiousness-reflecting low persistence, poor self-control, and lack of long-term planning-was associated with elevated mortality risk when taking into account age, sex, ethnicity/nationality, and all 5 personality traits. Individuals in the lowest tertile of conscientiousness had a 1.4 times higher risk of death (hazard ratio = 1.37, 95% confidence interval: 1.18, 1.58) compared with individuals in the top 2 tertiles. This association remained after further adjustment for health behaviors, marital status, and education. In conclusion, of the higher-order personality traits measured by the five-factor model, only conscientiousness appears to be related to mortality risk across populations.

So poor self-control and lack of long-term planning correlates with higher mortality risk.

Add this to the list of underlying variables that likely confound a whole lot of measured correlations between engaging in risky stuff and bad outcomes.

Underlying factors

Three more for the "underlying factors cause most observed correlations" files.

Item the first: Limited numerical ability predicts mortgage default for reasons not related to choice of mortgage contract. That is, those who are bad at maths are more likely to default even after correcting for sociodemographic characteristics and other measures of cognitive ability.

Item the second: Men in the control group who remembered to take their placebos had higher survival rates than those in the control group who forgot to take their placebos.

Item the third (via Jason Collins): those higher in conscientiousness (as measured by survey question answers) also report higher happiness and life satisfaction (also as measured by answers to survey questions).

The first suggests that banks weren't really putting the "can't do maths" clients onto contracts that would ensure default but rather that those who are bad at maths wind up more likely to screw up things like figuring out whether they can afford a given mortgage or structuring their affairs such that they can consistently make their mortgage payments. If banks weren't able to lay off mortgage risk on the government, and if they were legally allowed to do it, they might then wish to administer a maths test for prospective mortgage clients and provide a bit more hand-holding and advice for those who fail.

The second follows on nicely from Linda Gottfredson's work suggesting that IQ is the fundamental underlying health determinant. Sure, low-income predicts poor health. But that's mostly because low IQ predicts low income. And low IQ or low conscientiousness seems likely to predict forgetting to take the full course of prescribed medicines, as well as a pile of other health-relevant behaviours. It also suggests that the returns from quality nurses are higher than the returns from doctors: having better nurses who can help low IQ clients understand and follow doctor's orders seems a worthwhile investment. Or at least one more likely to yield reasonable returns than using income redistribution as health policy.

Remember how Van Halen would hide a line about M&M provision in their concert rider as a way of checking whether the venue had followed all of their stage direction instructions? I wonder whether doctors mightn't add some markers to their prescriptions that aren't themselves necessarily medically useful but that would show up on a patient's tests afterwards to indicate whether they're likely following doctor's orders.

The third perhaps tells us something about links between income and happiness. If conscientiousness drives both income and happiness, then perhaps it isn't low income that's the sole driver of low happiness among those on low income. I'm always a bit sceptical about these studies: questions about conscientiousness are pretty loaded with "how I want to see myself" and social desirability confounds. But there's a reasonably simple (albeit limited) test: if the link between before-tax-and-transfer income and happiness is stronger than the link between after-tax-and-transfer income and happiness, that's pretty consistent with underlying type driving things. We can't rule out underlying type if it goes the other way though as the effects of the change in income could dominate the effects of type.

Limit fast food outlets?

Should we blame fast food outlets for obesity?

Canterbury student Alice Robertson thinks so. The University's press release on her internship project has been picked up in a few places (Herald, Press). Alice's paper isn't yet available, but I've been promised a copy when it is. It sounds like it's mainly a literature review; she notes Day and Pearce, 2011 as particularly relevant. That paper found clustering of fast food outlets around schools. Such clustering doesn't prove an obesity link, just that the kinds of places that wind up being decent venues for primary and intermediate schools are also the kinds of places where fast food outlets wind up locating.

Robertson suggests limiting the number of fast food outlets near schools.

Rachel Webb is a doctoral student in our Economics department. She's presenting some of her thesis work at this year's NZAE meetings. She hasn't sought any press releases on her work because she likes making sure everything's nailed down before talking to the press office. And so her paper still says "don't cite without permission". But she's said it's ok for me to post on what she's been up to.

She's investigating links between obesity and high birth weights. In her quest for instruments that might correlate with obesity risk but that should not have any independent effect on high birth weight risk, she thought about fast food venue concentration. There's some evidence that such venue concentration affects obesity. If if doesn't independently affect high birth rate risk, then it can be an instrument (subject to the usual validity tests).

The density of different categories of dining establishments with a particular focus on fast food restaurants within the Territorial Local Authority (TLA) area that the woman resides in comprises my next set of instruments. A significant relationship between fast food restaurant density and obesity has been a prominent finding by health researchers over recent times. Rosenheck’s (2008) systematic review of 16 studies concludes there exists a significant relationship between fast food restaurant density and obesity[21]. It is generally agreed that fast food proximity lowers the notional cost of eating high caloric food and can therefore lead to higher obesity risk though the causality of the relationship is disputed [22]. It should not have any direct effect on high birth weight risk. However, like with rurality, there are plausible factors which could correlate with both food venue type and concentration and high birth weight risk. For instance, if unhealthy food venue options tend to concentrate in areas where people tend to be less health conscious for reasons that transcend deprivation level, ethnicity, age, rurality, or wider region then food venue type and concentration may have an avenue of correlation with high birth weight risk outside of the effect on obesity that I am unable to control for and could invalidate its use as an instrument. It is also possible that food venue type and concentration may be correlated with high birth weight risk through the effect of weight gain during pregnancy. Validity tests are required to check the soundness of this instrument.

So Rachel wasn't interested in the effects of fast food restaurant density on obesity per se: she was just looking for plausible instruments. And she's found something rather interesting.

A curious finding from the first stage results was that the fast food restaurants density in a TLA did not have the expected effect on obesity measures. The majority of the fast food chains showed consistently negative coefficients in the first stage and particular chains such as Hell’s Pizza, Burger Wisconsin, and McDonalds frequently showed a significant negative relationship with the propensity to be overweight, obese, and morbidly obese. KFC and Pizza Hut were the only chains to have a generally consistent positive relationship with obesity risk. It is not clear what is driving these findings as both median income of the TLA and the deprivation level of the meshblock have been controlled for suggesting it is unlikely to be socio-economic status, nor could it be the effect of living in urban areas as rurality variables are also included. The overall number of fast food establishments per person in a TLA was generally insignificant so it doesn’t appear to be driven by substitution away from less healthy options such as fish and chips either. More research into the effect of fast food on obesity is warranted. 

So, fast food restaurant density, in her regressions on New Zealand data, tends to reduce the prevalence of obesity. When she'd first presented this to the Department, I'd wondered whether what she was picking up was that folks hitting McDonald's would otherwise have been going to a fish'n'chip shop and eating even worse food; she's checked that, as noted in the blockquote, and that wasn't driving things.

Rachel wouldn't draw policy conclusions from her thesis work. But I'll draw one: we shouldn't be too hasty to ban fast food outlets near schools. I'll draw a second one: had Rachel sought press releases about her work, there would have been less uptake. There's reasonable media demand for panics about fast food restaurants, and about alcohol, and about "the kids these days".

Tobacco factoids

The Ministry of Health has an RFP out looking for an evaluation of their overall tobacco control policies; they want to know whether they could be more effective in getting to a zero-tobacco New Zealand by 2025.

Whether NZ should be Smokefree in 2025 is out of scope, but as it's policy set by the Minister, it's not really MoH's job to commission somebody to suggest that the government's priority is wrong here. Or, at least that's how it should be. When the Government isn't sufficiently anti-alcohol or anti-tobacco, there seems to be plenty of money to fund NGOs to urge the government to change its policy.

Anyway, one tidbit in their RFP, HT: @CarrickGraham:

The financial cost to society of smoking has been estimated to be $1.685 billion per annum (approximately 1.1% of GDP).  Major components of this cost include loss of productivity associated with premature, smoking-related morbidity and mortality, and preventable healthcare costs. Interventions that reduce the prevalence of smoking are cost effective actions that can reduce poor health outcomes and the associated costs to the health system.

A few points:

First, the $1.685b figure comes from the O'Dea report. In descending order, here are the costs they reported:

1. $570m in reduced production from premature mortality, although smokers on average come from cohort with reduced average life expectancy and lower earnings even if they don't smoke AND smokers bear the cost of this through reduced earnings;
2. $470m in resources diverted for tobacco consumption: smokers' spending on cigarettes net of taxes and net of the $180m in benefits that O'Dea reckons smokers get from their $650m in non-excise spending on tobacco;
3. $350m in costs to the public health system (note that tobacco taxes are roughly three times this amount);
4. $280m in reduced production from morbidity (although smokers bear the cost of this through lower wages);
5. $15m from smoking-induced fires (some of which will fall on the fire department).

More than a quarter of total reported costs are smokers' expenditures on tobacco. It's the second largest component overall. It's be kinda hard to tell that from the MoH summary though. Why do they keep pulling stuff like this?

So the only and substantial real cost to the public purse here is health care expenditures, which are more than compensated by excise paid and by savings to the superannuation system. The O'Dea Report agrees, noting that smokers are a boon to the public purse:

Without trying to calculate a precise estimate of 'external costs' it does seem reasonably apparent that the tax contribution of approximately $1 billion annually by smokers exceeds substantially the external costs of smoking which fall on non-smokers. If savings on pension costs from premature mortality of smokers were added as well the net fiscal contribution of smokers, to the fiscal gain of non-smokers, would be further increased.

I do hope that whoever winds up running the evaluation gives some thought to the cost-effectiveness of e-cigarettes in promotion of SmokeFree 2025. I wonder how John Key will pay for all the roads and stadiums without the net $650m/year or so that smokers contribute.

Comorbidity and costs

Another for the "underlying variables very likely cause both substance abuse AND negative outcomes" file, via +Ole Rogeberg . It appears that novelty-seeking and conduct disorder strongly predict future alcohol, tobacco, and other drug use among youths.

They suggest that early identification of those likely to be at risk and subsequent management of conduct disorders and of novelty-seeking behaviour might reduce the risk of substance abuse.

Behavioral or pharmacological treatment of disruptive disorders in children and adolescents is likely to have lasting effects across multiple disruptive psychopathologies due to the common thread that underlies ADHD, CD [Conduct Disorder], and NS [Novelty Seeking] — the inability to plan out actions, inhibit actions, and consider the implications of actions (impulsivity) (Miller, Stephen, & Tudway, 2004). For instance, preliminary findings from our lab recently determined that higher levels of CD and ADHD symptoms are associated with higher levels of initial sensitivity (e.g., subjective and autonomic experiences, such as reports of pleasure, liking the taste, nausea, heart rate) to alcohol and tobacco during adolescence, which suggests that these individuals may be primed to be more responsive to substances of abuse (Bidwell et al., 2012; Palmer et al., 2012; Wills et al., 1994).

Think back to how social cost studies tend to attribute the costs of substance abuse. They begin by defining as counterfactual the average outcomes for all individuals of similar age and gender; the monetised difference in outcomes between average non-abusers and substance-abusers is taken as social cost.

But those likely to become heavy substance-abusers would not have had average outcomes had drugs, alcohol, or tobacco never existed.

The relevant counterfactual group are those who were at similar risk of becoming substance abusers and who managed to avoid it. And even that will lead to overestimates because the general-purpose technology that lets those lucky individuals avoid substance temptations would itself drive outcomes.

It's entirely likely that substance abuse aggravates things for those with disruptive psychopathologies and that the costs they impose on others are consequently higher than they would have been. But substance abuse is only responsible for part of that cost - not for the whole she-bang.

It's also worth pointing out that this new study tilts the scales further in favour of Ole Rogeberg in his argument with the Dunedin folks about cohort selection effects. I still wish that Dunedin could be convinced to put up a GSS-style front end for their data so that other researchers could check results while not compromising privacy.

Reason to love NZ #58: A functioning health care system

New Zealand's public health system makes up about 18% of aggregate government expenditures. Add in $1.1 billion for ACC, the government-run accident insurance company, and you get about $15.3 billion all up, or about $3475 per capita. This is complemented by private insurance for those who wish to have private insurance; about 30% of the country subscribes.

Health insurance for our family of four costs $140 per month. It comes out of after-tax income and is not tied to any employer; if an employer provided health insurance, the fringe-benefit tax would apply to avoid the distortions that Americans crave. So losing your job only means losing your health insurance if you can't pay your premiums. We have a relatively high deductible, here called an "excess", of $2000. GP visits and prescription drugs are subsidised through the public health system but not entirely; we don't have a government services card provided to lower income Kiwis for greater subsidy. A GP visit costs about $40; it's cost us between $2 and $20 to fill a prescription script. We never bother saving the receipts because it's exceptionally unlikely that we'd ever reach $2000 unless some large event happened. We specifically wanted only a high-deductible emergency policy; such policies here are easily obtained because there aren't a bunch of crazy US-style mandates requiring coverage for a bunch of stuff we don't want.

Maternity is not included as part of private health insurance. With each of our two kids, the public health system covered the cost of the midwife of our choice; we supplemented that in both cases with a private obstetrician. The fixed-cost price for the first pregnancy was $2000; the second was $3000. In both cases we ended up with an emergency Cesarean provided by our hired obstetrician that involved no additional out-of-pocket expense or insurance claim. I expect that the public health system defrayed the costs of the emergency Cesarean.

A month ago, we had our first call on our private health insurer. On a Thursday, Susan fell rather ill. An evening visit to the 24-Hour Clinic was followed by a Friday ultrasound confirming gallstones. On Sunday, a physician from the 24-Hour Clinic called after having reviewed Susan's files and recommended antibiotics for inflammation that they'd missed on the Friday visit; I picked them up that afternoon. A Monday visit to the GP's office gave a Tuesday visit to the specialist surgeon. We called Sovereign, our health insurer, from the doctor's office at 12:30 PM, then faxed off some easily acquired paperwork at 1:00. Two hours later we had insurer sign-off for a Wednesday surgery at Southern Cross Hospital. Southern Cross is the biggest private insurer; our insurance is with Sovereign, but that wasn't a problem. The public health system also sometimes contracts for services at Southern Cross when there isn't enough capacity at Christchurch General.

The laproscopic surgery went well. Susan spent a night at Southern Cross Hospital and was home the next day; I ducked out of a Scholarships Advisory Committee meeting to run shuttle. We also have very nice scope pictures from the surgery. I wish I had asked about it earlier as the surgeon said that, with enough notice, we could have had a video. That would have been awesome; they just hadn't had the time to set it up since I'd waited too long to ask.

Our surgeon is contracted in by the public health system to perform surgeries for them; the public system would have had a couple months' wait. Because high-demanders like us are willing to pay extra to get things done quickly, the system as a whole gets more specialists who also can provide services to the public system. Similarly, our private obstetrician was also sometimes the duty senior obstetrician at Christchurch Women's Hospital. The public and private systems complement each other very nicely; such arrangements are entirely illegal in Canada.

Things I have never ever here had to do:

• Worry about whether our preferred GP, obstetrician, or specialist takes the insurance that we have;
• Have to take the insurance recommended by our employers;
• Have insurance tied to employment;
• Save receipts for reimbursement later on [we just mailed the bills to the insurer];
• Add up total health expenditures for a tax form to get a deduction;
• Wait in really long queues (Canada);
• Pay tons for private health insurance.

The Oregon Medicaid Study, as I read it (or see Cowen here), shows that the expansion of Medicaid mostly helped by reducing catastrophic costs that can otherwise face families with big health surprises. I can believe that finding. America has decided to make it difficult to get inexpensive high-deductible insurance coverage. If we take anything from Oregon, it should be that cheap catastrophic insurance should not be barred by regulatory mandates that effectively turn it into a full-cost full-coverage policy. [Update: see also Ross Douhat; Josh Barro disagrees]

There are many medical conditions where the expected quality of service in America far exceeds what is here available; big places can afford the expensive machines with the high fixed costs. But, on average, boy do we prefer things here. 

If you're weighing up a move to New Zealand and considering the drop in after-tax salary, look instead to the rather smaller drop in after-tax, after-health-insurance salary here. We pay $1680 NZD per year for catastrophic coverage for a family of four. So this year, including the $2000 deductible from an unexpected event, we paid about $3700 for health care out of after-tax earnings.

Lobbying isn't everything

Conspiracies and power struggles everywhere. Here's Auckland's Boyd Swinburn on the New York soda ban being overturned.

Boyd Swinburn, the University of Auckland's professor of population nutrition and global health, said the court battle's significance was in the power play it represented between government and industry, "the power politics between public health versus private profit".

"It does show the enormous power of the food industry. It seems to be marching from victory to victory around the world, including New Zealand."

Justice Tingling, if I read the ruling correctly, basically said that the Health Board hasn't the legislative authority to regulate this kind of thing unless New York City Council enacts legislation allowing it. I'm no lawyer, but I've no reason to expect Tingling has this wrong.

I'd also expect that if Bloomberg really wanted the ban and thought he had the votes on Council to do it, he'd be trying to get the ban through Council rather than talking about judicial appeals. If he hasn't the votes to get it through City Council, maybe it's because Swinburn's "power of the food industry" hypothesis, or maybe it's because a bunch of people in Brooklyn are fed up with this kind of nonsense and would punish their Councillors for it. I've not been following the poling on this closely; a quick Googling suggests that it's hardly a policy drawing unanimous appeal and that would have passed but for Big Sugar. Instead, there's a slim majority in opposition to the policy.

But Swinburn's all about the framing here: "public health versus private profit". Voter preferences don't enter into the story because they're all on his side, never mind the polling. Expect this framing to be used here when Swinburn's type push for similar policies here.

Morning roundup

Item the first: New York Supreme Court Judge Milton Tingling blocked Bloomberg's ban on Big Gulps. I agree with the Judge here:

Judge Tingling found the Board of Health's mission is to protect New Yorkers by providing regulations that prevent and protect against diseases. Those powers, he argued, don't include the authority to "limit or ban a legal item under the guise of 'controlling chronic disease.' "

The board may supervise and regulate the city's food supply when it affects public health, but the City Charter clearly outlines when such steps may be taken: According to Judge Tingling, the city must face imminent danger due to disease.

"That has not been demonstrated," he wrote.

Judge Tingling also suggested that Mr. Bloomberg overstepped his powers by bringing the sugary drink rules before the Board of Health, which is solely appointed by him. The City Council, he wrote, is the legislative body "and it alone has the authority to legislate as the board seeks to do here."

But a malicious part of me really wishes this had gone ahead. The ban looked to be an intractable nightmare that New York, having elected Bloomberg, really deserved to endure. They could have served as example unto others. Instead, the lesson is that judges will bat back things that are entirely too crazy, so there's no harm in electing Bloombergs. Sometimes, the electorate does deserve to get what it wants, and that right hard.

Item the Second: Rasmussen polls show 36% of Americans think it's at least somewhat likely that Fukushima radiation "did significant harm to the United States." I would bet that a survey of scientists specialising in radiation would find no more than 1-2% thinking it did significant harm to the US, and those would be saying that the negative effects were through reduced public acceptance of nuclear power. I really really wish that polls of this sort, where there is a right scientific answer, or at least a likely strong consensus among scientists, would mention it. The survey doesn't mean that there's a 36% chance that it did harm, it means that 36% of Americans are scientifically illiterate.

Valuing amenities

A few things I tell my Economics & Current Policy Issues Class:

• It's double-counting to weigh the direct costs of some disamenity as well as the disamenity's effects on land values because the latter incorporates the former (and the same for positive amenity affects);
• We can weigh the value of hard to value things like mortality risk by looking for effects on priced markets. Differential on-the-job accident risk can give us measures of the value of a statistical life. The value of a neighbourhood park can be approximated by housing price effects, and the same for the value of neighbourhood disamenities.

And so I'll have to remember this rather nice NBER working paper by Currie, Davis, Greenstone, and Walker. They pick a relatively hard case: plants that emit toxic chemicals that are sometimes hard to smell or see. They find emissions decline exponentially with distance from the plant, reaching baseline levels a mile from the plant. When a plant opens, housing prices in a half mile radius drop by 1-2%; when it closes, they go up by 2-3%. Within a mile, the price drop is 1.5%. A plant within a mile also increases the likelihood of having a low birthweight child by two percent (that percent, not percentage points, and the base rate incidence is low). 

When they add everything up, they find that a plant's opening reduces average housing market capitalisation in the surrounding mile by $1.5 million on average,* and that the costs of low-birthweight births in the surrounding mile are about $700k. So the disamenity cost, as measured by housing prices, is about twice the biggest likely measurable health effect. And that's entirely consistent with housing markets capitalising the real imposed disamenities. The biggest price effects are closest to the plant, where health disamenities combine with the noise and sight of the plant, then decline towards the one mile mark, where there are still real health effects but the other disamenities are negligible relative to those in the reference category of homes 1-2 miles away. 

They also find that neighbourhoods around plants pick up in demographic characteristics after a plant's opening: people move there for jobs. They wonder whether this is consistent with fully informed decision-making, but it's rather plausible that, given the low absolute risk imposed, households simply value being within walking distance of work more than they dislike the disamenties. 

On the whole I take this as pretty supportive of our base-line theory on this stuff and reasonable evidence against the "Oh, but people are stupid and irrational and they would never live there if they only knew and we have to ban a pile of stuff" alternative hypothesis.

* By way of comparison, they note that a typical plant - a small coal-power plant - costs $280m to build. The disamenity effect, though real, isn't some big huge cost that would tip the balance against approving the plant were it incorporated.

Otago Bioethics: Downs Edition

Robert Cole and Gareth Jones, a student and Emeritus Professor, respectively, at the University of Otago, provide a sensitive and balanced analysis of ethical issues around enhanced prenatal screening for Down's Syndrome [gated, sorry].

The new test is non-invasive, relying on a blood test for the mother rather than amniocentesis, which imposes risks on the foetus and consequently requires a fairly grisly cost-benefit analysis for parents where the nuchal scan suggests potential problems: weigh the risks and costs of an accidental miscarriage in the likely case that DS wasn't present against the risk and costs of continuing with the pregnancy if you would have otherwise wished to abort and try again if you had known DS were present.

Now the new test isn't perfect, but Cole and Jones extrapolate to the likely future case where a noninvasive test is very sensitive and can completely replace amniocentesis. Is the DS lobby group "Saving Downs" right that a better test would be eugenic and discriminatory? Cole and Jones weigh things up:

But what would NIPD mean for the DS community? Increased uptake of tests will result in increased detection of DS, and probably more terminations. The number of DS births may, as a result, drop. However, it is unlikely that DS will disappear. Abnormalities escape detection using even the most rigorous diagnostic techniques, and there will always be women who do not wish to undergo testing. 

But as more pregnancies are tested, will DS become a ‘rare’ disorder? In time, perhaps. However, the life expectancy of those with DS is increasing, and is likely to soon approximate that of the non-DS population.15 This will mask, at least temporarily, any effect of NIPD on the prevalence of DS. Hence, even with a rapid increase in the uptake of NIPD, it is unlikely that the numbers of those with DS will change markedly in the near future.

The new procedures have no greater ethical problems than current procedures; it's rather less than obvious that the current procedures are wrong either. Cole and Jones note the main point of both is to provide accurate information to parents to help them in making an informed decision. They conclude:

We concurrently offer prenatal screening and value the disabled by upholding several values in society.

First, we value an ethic that stresses the importance of ‘doing the most good’. On these grounds we accept that in some cases, the perceived disadvantages resulting from a DS pregnancy (to child and family) may outweigh the perceived good from the child’s life.

Second, we value reproductive liberty, the ability to make individual decisions over one’s pregnancy. Others, such as the state, are limited in their control of this right. Alongside these we uphold dignity, respect and justice, realising that those who are disabled demand equal respect as citizens, thereby deserving support from society.29

Inevitably, these values must be held in some tension; but as long as they are recognised as important, we will make sure one (e.g. reproductive liberty) never fully undermines another (e.g. respect for the disabled). From this, we can argue for two compatible viewpoints - that screening is justified, and that the disabled will continue to receive support and respect from society.

I'm not generally a big fan of Otago bioethics, but the article here seems exceptionally mild in its conclusions; it isn't hard to follow Peter Singer in defending stronger conclusions than these. Indeed, you could expect Otago to go further: if Otago Public Health says the State should compel me to act in ways that make me healthier and that potentially consequently cost the Ministry of Health less, over matters of fairly trivial cost to the State, the lifetime burden on public support systems involved in the decision examined by Jones...well, I'm not going to go there. I'll just note that the conclusions here seem very mild and easily defended.

Nevertheless, the Saving Downs people want Professor Jones to resign.

Mike Sullivan, a spokesperson for Saving Downs, said on Wednesday that people with Down syndrome lead good lives and it is inappropriate for a leading academic to suggest that they are a burden.

It seems completely obvious that those choosing to bear and raise children with Down's can derive great joy from their children. It also seems completely obvious that many other parents would find the lifetime costs to be very high, and the opportunity costs in terms of other children they could have otherwise had as replacement to be exceptionally high.

Somebody needs to invite Peter Singer to give some lectures in New Zealand.

Microeconomist Club has rules

First rule of Microeconomist Club: commit yourself to methodological individualism and respect the world's rich diversity of utility functions. Consider that others' actions may be inspired by the optimisation of a utility function the likes of which is beyond your ken.

Second rule of Microeconomist Club: cast into the outer darkness those doing violence to the first rule.

Swarthmore historian Timothy Burke would perhaps have fewer complaints about 'neoliberal' economics if there were greater adherence to the rules of Microeconomist Club. Burke despairs that public health discourse has put such focus on social cost arguments:

Or maybe the math works out and yes, I should try to live a little longer and be injured somewhat less…in order to avoid costing society some slightly higher amount for my careor some fraction of lost productivity. And here we have arrived deep in the belly of the neoliberal whale, just in time to watch the experts and technocrats hand out machetes to we, the swallowed. If you want an explanation of the meanness of 21st Century American public discourse, for the fractures in the body politic, this will do as a starting place. “Get that guy to wear his helmet, because otherwise he’s going to cost you money.” “Get that woman to lose weight, because otherwise she’s going to cost you money.” “Hassle that couple because their kid plays too many video games and might slightly underperform in school and not make the contribution to net productivity that we are expecting of him.”

We are offered a thousand reasons to complain of other people’s behavior (and to excoriate and loath our own) on the grounds that it will cost us too much. That we should talk about what is good and bad, right and wrong, mostly in terms of the selfish consequences, or at best, in terms of the kind of closeted idea of a collective interest that neoliberalism dare not directly speak of–sort of the nation, sort of the economy, sort of the community, but really none of those directly or clearly.

The large majority of purported social costs tallied in health measures are really the costs individuals impose upon themselves. It has never been 'neoliberal' economics to force people to internalise costs that are already internal. It's just bad economics that ought be cast into the outer darkness.

Burke continues:

For another reason, because it’s harder to just keep hammering at some change in an inflexible and unreflective way. When I was in seventh grade, I once screwed up my courage to tell my intelligent, sensitive, very queer, 50-something chainsmoking English teacher that he should stop smoking. He winced, teared up a bit, thanked me for caring, and said, “But darling boy, I think it would hurt me worse at my age to try and stop”. Which at seventh grade I was not prepared to understand, but now I can. When we care about others, we also know that there are reasons why they ride motorcycles without helmets or serve chicken nuggets three times a week, reasons that are profoundly built into their specific humanity or are at the least not really worth the harm and cost of the persistent harassment that might push a change in habit.

Which is another reason the technocrat avoids this mode of argument. Because to see people in this way is to be seen. If it’s about the empirical evidence and the abstract costs of acting or not acting, the expert can stay invisible and outside. But when we sit down to persuade through love or affection, we are naked and vulnerable ourselves. Our bodies and habits are as seen as those we are looking upon. The worst of all worlds is the person who borrows the grandiose certainty and intensity of public health and imports its rhetoric into more intimate kinds of observing and commenting upon others. [emphasis added]

I'd go further than this. I have some insight into the utility functions of the people I love, but even there my simulations often err. I have a partial and limited understanding of the utility functions of other acquaintances and friends. I can imagine being able to persuade a close friend that some chosen course of action is not the best way of achieving his ends as he sees them - being able to imagine the ends, understanding the constraints, and weighing appropriately the chances that I just had simply misspecified the utility function. I couldn't imagine doing the same for a stranger unless he asked me for advice while specifying the desired ends.

But the State cannot see our diverse ends. I can imagine a particularly good social worker perhaps having some useful advice for beneficiaries in that worker's case file. But it's not the place of the State to persuade with love and affection. We rightly laugh at corporate ad campaigns purporting that some logo loves us. Pity the fool who believes those ones, right? But how is it more plausible that the State can love us or that we can love each other through the State?

Burke gets the bolded bit above entirely right. As individuals, we have some limited insight into the utility functions of our friends and loved ones, and into the constraints they face. We can tailor our advice or admonitions accordingly, and refrain where we can see the costs of change as being in excess of the benefits while trying to account for the costs and benefits as they are viewed by the target of our affections. The state cannot do that. It simply cannot tell what comprises the good life for each of us given the diverse set of "good things" and the myriad ways of trading them off against each other at the margin.

And while voluntary organisations can harness altruistic love for charitable purpose, it's awfully hard to channel that impulse through State bureaus: bureaus predicated on love fail where you can't be sure that you've hired staff that are always motivated by it and will continue to be so after extended contact with clients; the tick-box process rules that act as substitute make it hard for those actually motivated by love to achieve much.

Coroner recommends

Search Google NZ for "Coroner recommends" and you'll find:

• Coroner recommends quad-bikes be equipped with rotational towballs
• Coroner recommends that all farm houses be fenced off. "Mr Scott called for farmers and Labour Department officials to lobby the government to make fencing compulsory on all farms"
• Coroner recommends age restrictions on butane and other possible inhalants. 
• Coroner recommends people wear hard hats when climbing ladders to prune trees (whether they should be required when doing other things on ladders is not discussed)
• Coroner recommends that the refrigeration industry develop guidelines for safe storage of explosive refrigerants.
• Coroner recommends compulsory spot checks of children up to the age of 5.
• Coroner recommends the Government urgently assess media guidelines on reporting of suicide.
• Coroner recommends changes to design of future prisons
• Coroner recommends MoH strengthen guidelines on safe sleeping practices for newborns.
• Coroner recommends review of CT scans (to use them more often)
• Coroner recommends respite care review
• Coroner recommends that you should have to have a licence to rent a nail gun.
• Coroner recommends licensing of outdoor education / adventure tourism operators.
• Coroner recommends clearing trees near train crossings.
• Coroner recommends changes to privacy laws.
• Coroner recommends restrictions on access to glaciers
• Coroner recommends DHB review suicide assessment procedures
• Coroner recommends more training for mechanics
• Coroner recommends national manhole safety guidelines.
• Coroner recommends helmets for riders of motorised skateboards.
• Coroner recommends crowd control training for all airport staff.
• Coroner recommends warning labels on Coke.
• Coroner recommends mandatory high visibility clothing (not just vests) for cyclists. 

The Coroners Act 2006 empowers coroners:

to make specified recommendations or comments (as defined in section 9) that, in the coroner's opinion, may, if drawn to public attention, reduce the chances of the occurrence of other deaths in circumstances similar to those in which the death occurred; 

Persons appointed as Coroner "must have held a practising certificate as a barrister or solicitor for at least 5 years."

I'm sure that these are all smart and diligent people. I'm also sure that there is no required training in cost-benefit analysis in a legal degree.

The problem seems to be in the Act. Pretty much anything that could reduce the chances of particular forms of death can be recommended; there's no consideration anywhere of costs. It's fine to say that that's Parliament's job. But Coronorial recommendations carry some weight - people take them as being something more than "This is something that could save lives, but I have no clue whether it's worth it because I have zero training in policy assessment and cost-benefit analysis, so somebody else better figure out whether we'd be wasting a whole ton of resources in enacting it; moreover, the Act specifically asks me to just name any darned thing that might help even if it would cost a trillion dollars and save a life every fifty years."

I'd be willing to bet that a reasonable proportion of the above recommendations would fail any serious cost-benefit analysis. Mandatory high vis clothing for cyclists, licenses for nail guns, and mandatory skateboard helmets all seem exceptionally unlikely to pass any kind of "is this a reasonable policy" test.

This economist recommends that either Coroners get training in cost-benefit analysis, or start noting the limitations of their recommendations.

Update: Matt Nippert points out that the Chief Coroner wants it mandatory that government respond to Coroner recommendations. I would hope that the default response would be "The value of a statistical life for policy purposes in New Zealand is $3.8 million; the policy seems exceptionally likely to impose costs in excess of $3.8 million per statistical life saved. Please go away and come back with something reasonable."

Update 2: Russell Brown notes that the high visibility recommendation wasn't even based on the facts of that accident but rather on the coroner's "common sense". Egads.

A global phenomenon

So it isn't just New Zealand's Ministry of Health who seem to apply different standards of evidence on the health effects of alcohol depending on whether, for any particular disorder, alcohol consumption seems to ameliorate or worsen the condition. I'd written:

The New Zealand Food and Nutrition Guidelines for Older People [Updated: see here] talks a whole lot about the risks and very very little about the benefits. Recall that the J-curve is strongest for middle aged and older people.

Alcohol causes a range of adverse effects on health, including cirrhosis of the liver, pancreatitis, endocrine disorders, cardiomyopathy, gastritis, high blood pressure, haemorrhagic stroke, and cancers of the mouth, pharynx, larynx, oesophagus, breast and liver. It also contributes to death and injury on the roads, drowning, suicide, assaults and domestic violence, other non-traffic related mortality and morbidity, and some mental health disorders and sexual health problems. High levels of alcohol use are also associated with alcohol dependence and abuse (Ministry of Health 2008a). Moderate alcohol consumption may have some benefits for older people, but further research is needed to fully understand the potential benefits.

Every risk is conclusively proven; every benefit needs further study.

There's an interesting letter in the latest issue of The Lancet. Michael Roerecke and Jurgen Rehm recently put out another metastudy on the cardioprotective benefits of low to moderate alcohol consumption. They don't recommend that people start drinking for heart health, but they find the cardioprotective benefits awfully hard to deny.

Well, Tim Stockwell tries to deny it. He's the one who recently suggested that minimum pricing for alcohol in British Columbia strongly reduced alcohol-related mortality rates despite that the aggregate B.C. time trend showed no particular decline in mortality; I suppose the counterfactual had to have been a stronger worsening.* Anyway, in a letter to Addiction, he keeps wondering if it's possible ever to derive any evidence of protective benefits from population epidemiological studies because of potential uncontrolled confounding. Except, as you'll recall, that most of the evidence we have of the harms of heavy alcohol use hardly come from experimental studies where we tell the treatment group to drink a fifth of whisky a day while telling the controls to abstain; it's the same kind of epidemiological evidence which is also subject to potential confounding from that heavy drinkers would not be like moderate drinkers even if they didn't drink: the things that predispose you to alcoholism seem likely to predispose you to all kinds of other negative outcomes. Confounding is everywhere.

And so I just loved Roerecke and Rehm's reply to Stockwell in the latest issue. They write, in a beautiful glove slap:

Given the above points and further points made in [1], it seems that some researchers in the field may be using different standards in assessing the cardioprotective effect of alcohol vs. its detrimental effect. Consider two examples. One is the effects of alcohol on colon cancer [12]. Would the same arguments used to judge the relationship between alcohol and ischaemic heart disease not hold for this relation as well? The other example is the more than 200 other risk relations between alcohol and disease and injury outcomes [13]. Of course, this is not a good argument against scrutinizing the cardioprotective effect of alcohol, but we sense a desire by some in the field to apply tough standards on protective effects and more lenient standards on other effects, where sometimes the responses to very simple survey questions such as ‘Did your partner’s alcohol consumption contribute to your marriage problems?’ are accepted as causal evidence.

 It seems that I'm not the only one frustrated by non-truth-seekers.

* The study is here; I've not had a chance to assess it in much depth. I'd be curious whether running the CPI in place of minimum prices in their series would yield similar effects to those found - there isn't that much change in the minimum price over the period, and they use CPI adjusted prices. That has to be most of their price variation over the interval. I'd also be a bit nervous about using a panel estimator where my main regressor of interest had no panel variation. And, I'm not sure that I've ever before seen this line in an empirical paper, or anything like it:

Estimates for acute AA deaths prevented are not provided due to both counter-intuitiveness and the lack of stability in the lagged associations for these short-term outcomes.

I'm also not quite sure what to think about their using lengthy lags of prices where most of the time series price variation is just CPI. Surely lagged consumption would have a better basis in theory for predicting current acute injury than would lagged prices where most price variation is CPI. I also note that while Chris Auld, an applied econometrician whose work I trust, had worked with this group on price elasticity estimates a while ago, his name isn't associated with the group's more recent adventures. So I'd have to check the group's new work in reasonable detail before I'd believe it.

Contraception costs

Berk Ozler asks whether the government should provide free emergency contraception for young girls. It's an interesting question, especially as the Taranaki District Health Board recently announced plans for free EC provision.* Berk summarises the existing literature pretty comprehensively.

But I'll quibble a bit with his policy conclusion, at risk of channeling Steven Landsburg.

Berk and I agree entirely on his first conclusion: the morning after pill should be easily available without a prescription. It's safe, accidents (or worse) happen, and the barrier of going through a doctor can be non-trivial.

He then asks if it should be subsidised. Berk writes:

That question is more difficult. It depends on the future costs of teen pregnancy (and abortions) – both to the individual and to society. If children from single parent families, poorer families, etc. are more likely to need EC but less likely to be able to afford it, it may make sense for the government to subsidize the cost. Even if the costs are solely to the future adult herself and not to the society in general, they can be justified under the principle of ‘second chances’ – after all we’re talking about children and young people here. If there are positive externalities, the argument for subsidies is even simpler. So, I’ll return to the issue of subsidies after reviewing the literature on the individual consequences and public health externalities of making EC freely available to young people.

Berk's summary of the relevant literature:

• "There is some reason to worry about children's outcomes in teen pregnancies" 
• increased risk of poor natal outcomes


• "The evidence on the effects of teen pregnancies on future outcomes of the mother are mixed. There is not enough here to justify a strong stance for a policy decision." 
• Most of the effects you see in the cross section are due to that women having children in their teens tend to be different from those who decide to wait until they are older, and would have different outcomes even if they had not had children while young. 


• There is little evidence that use of the morning after pill has any effect on teen pregnancy rates, abortion rates, or STD rates, though it does somewhat reduce condom use.
• Berk here highlights that failure to use the emergency contraception even where provided may be a problem, perhaps due to "a failure to recognize (or acknowledge) a risk of conception on part of the prospective users." He writes:

  “In a survey of thousands of teenage mothers who had unintended pregnancies, about a third who didn’t use birth control said the reason was they didn’t believe they could get pregnant. Why they thought that isn’t clear.” The evidence is suggesting that (a) unprotected sexual activity is high among people who don’t report not wanting to have children; and (b) they don’t use the free EC that is in their drawer and can be used for up to 5 days after the unprotected sexual activity or a contraceptive incident. You can take a horse to the water, but you cannot make him drink… 

He concludes that though the public health effects may be negligible, emergency contraception should be available for young people and, ideally, free if we can afford it.

Ozler notes that the morning after pill costs $40 USD and that there's some evidence that teens substitute to its use from condoms (which are rather cheaper). If there's little evidence of other policy-relevant benefits from widespread subsidised EC availability, then I'm having an awfully hard time seeing why the government should stump up $40 per dose.** The NZ Family Planning website sells condoms for about $1.50 each.

I'm also pretty sure that  the government provides subsidised access to condoms via a doctor's prescription.

Steven Landsburgh controversially wondered last year why he should be paying for other peoples' birth control. I can see some decent second-best arguments for that the government subsidise birth control, not least of which is that it may partially offset the incentives created by governments' commitments to support children borne by those who cannot afford to raise them. The elasticity of birth rates among the improvident to subsidised childbearing may be rather larger than the elasticity with respect to the financial cost of contraception, but the former isn't much on the table aside from DPB work requirements. Whatever the second-best arguments for subsidised contraception, I have a hard time seeing the case for a general subsidy for a relatively expensive method of contraception.

* This follows on from a similar trial at the Auckland DHB. One of my projects for the coming semester is to get data from sexual health clinics on STD rates to see whether the Auckland trial had any effect on STDs. We'd started getting things lined up to get that data in the spring*** of 2010, and then the earthquakes put it rather far onto the backburner.

** If you want to subsidise the morning after pill for women seeing a doctor after sexual assault, I'm on your side. That's different from giving it for free to everybody.

*** Wow, North American habits die hard. First draft said fall. But it was August/September. And that's spring here.

Death Bias

Siouxie Wiles asks an interesting question: do Kiwis' expectations of what they'll die from, and expectations of current death rates, match up with aggregate death rates?

If people overestimate the risks of some kinds of death, this could lead policy to be biased towards spending too much trying to avoid that kind of death and too little on other risks.

Mike Dickison produced this infographic on actual causes of death in 2009.

They then contrast this with the survey findings:

The full set of slides is here.

I love this initiative. But there's a pretty big problem. If I expected to die of a heart attack, emphysema, or cancer in my 90s, I'd probably say "Old Age" rather than any of those specific disorders on a survey. I might even fail to think about "people in their 90s dying of cancer" when answering how many Kiwis I think die of cancer every year. Somebody in his 50s, that's dying from cancer; somebody in her 90s... I might just not think of it that way. Maybe I should think of it that way, but it's also pretty plausible that somebody dying of cancer in their 90s would have died of something else a few weeks later but for the cancer.

So I'm not sure we can say people are underestimating their risk of dying from diseases associated with old age, like cancer, circulatory disease, or respiratory disease, when "old age" is a survey response. Similarly, I can imagine answering "suicide" to that questionnaire even though I have absolutely no intention of killing myself except in old age if my expected future utility stream is sufficiently low.* Those expecting law changes around euthanasia and thinking that a reasonable end may well answer "suicide".

I'm not sure what the best way of fixing this might be. You could go back to the MoH data and restrict the actual death sample to deaths among those under a plausible "old age" cutoff line - say 70 - and see whether survey expectations among those providing an answer other than "Old Age" matched those expectations. You could re-run the survey, noting explicitly and up-front that the New Zealand death statistics do not consider "Death by Old Age" to be a category, and that respondents thinking about people dying in old age should think of the proximate cause of that death.

This is important. In the slides, when asked whether suicide, melanoma, or road accidents were associated with the most deaths, melanoma got the most votes despite being responsible for the fewest deaths. By survey response, respondents thought that melanoma was the worst, followed by suicide followed by road accidents. In reality, the rank order is suicide, road accidents, then melanoma. This could very plausibly lead to underinvestment in initiatives that prevent suicide relative to investments targeting melanoma. Note also that the "old age" confound is likely to attenuate the degree of measured public bias here if some people would count melanoma deaths as just being old age if the death were experienced by an older person - real numbers could be worse.

I look forward to seeing where Siouxie's team goes with this. It's worth their following up.

* Does "Voluntarily going in for brain plastination or cryonics in old age in hopes of later uploading if the singularity hasn't happened yet" count as suicide, or does failing to do so count as suicide? I'd lean towards the latter.

Marijuana snark

Ole Rogeberg produced a pretty thoughtful critique of the Dunedin Longitudinal Survey group's finding that marijuana use reduced IQ. And, he subsequently wrote a very nice summary of the dispute, along with some musings about whether scientific progress is helped or hindered by media sniping.

Rogeberg's critique wasn't based on replication of the Dunedin study. Indeed, Rogeberg couldn't even get some summary stats out of the Dunedin group. He writes:

When I originally started looking into this last August, I sent an e-mail to the corresponding author asking for a couple of tables with information on “pre-treatment” differences between the exposure groups. I did not receive this. This is quite understandable, given that they were experiencing a media-blitz and most likely had their hands full. I therefore turned to past publications on the Dunedin cohort to see if I could find the relevant information there. 

Do read the whole thing. It has a whole lot of very substantial critique. But this bit above piqued my interest. Because he was criticized by Dunedin's Prof Poulton for, well, you read it:

Rogeberg said the political approach to cannabis could change depending on whether there was a change in young smokers' IQ because of the drug itself, or because of living conditions.

He said his study did not mean the results of the Dunedin study were discredited, but it was fair to say the New Zealand study's methodology was flawed and the results premature.

But Professor Richie Poulton, co-author of the Dunedin research, said Rogeberg's data was not taken from real people.

"Rogeberg's challenge is based on simulations, but we used actual data on 1000 people to carry out the analyses he suggested," he said. [emphasis added]

I'm going to take this as Poulton offering to share his data with Rogeberg. Because it would be rather, well, gauche to criticize somebody for failing to use data you've refused to share.

I completely understand the Dunedin Longitudinal folks' unwillingness to share data given the rather high costs they've incurred in collecting it; it just seems off to critique somebody for having used simulations rather than data after you've refused to share the data.

DTC prescription drug advertising

John Pickering at SciBlogs' Kidney Punch recommends banning direct-to-consumer drug advertising in New Zealand. He writes:

New Zealand is one of the few countries in the world where pharmaceutical companies are allowed to advertise to consumers directly.  I believe this is detrimental to our health and I call on the government to ban the practice immediately.

I expect that the case against DTC advertising is weakest in New Zealand, precisely because of Pharmac. But let's walk through it.

Let's begin with the best case against DTC advertising. Brekke and Kuhn, 2006, argue in the Journal of Health Economics that DTC encourages manufacturers to provide greater detailing (lobbying physicians about their drug's particularistic benefits) and so better to segment the market; this allows manufacturers to increase the price of their drug with less harm to their drug's relative demand. Where consumers are not price sensitive, this can lower consumer welfare - if somebody else is paying for the drug, and the one on the ad seems shiny, why worry about the price?

Now let's think about the New Zealand pharmaceutical market. Pharmac is the government's drug-buying agency. They develop a schedule of drugs worthy of funding based on clinical effectiveness and cost; people can buy non-funded drugs, but it comes out of their own pocket unless they have private health insurance that covers non-funded medications. The cost jump in moving from scheduled to non-scheduled pharmaceuticals then is substantial.

And, physicians seem reluctant even to mention treatments that could be off-schedule. Based here on personal experience, we almost had to pry out of our physician a list of non-funded vaccinations that she thought worthwhile but that weren't on the funded schedule. Had we seen ads for a chicken pox vaccine, we would have been made (expectationally) better off; we didn't know one existed until we heard about it from friends in the States.

Consumers here will not be price sensitive among scheduled drugs, but they should be when going off-schedule. And all the drugs on the schedule have already been vetted for cost-effectiveness. Maybe there could be some second-order distortions where DTC could lead a consumer to ask for a scheduled drug for an off-label use for which it's less effective than some other scheduled drug. If we expect doctors here would fail to provide alternative advice, either because the kinds of patients who do all their research online before coming to the visit are a hassle to deal with, or because they've been lobbied by the manufacturers of DTC-advertised products already, then this could yield some losses. And maybe this could hold for some on-schedule drugs still here under patent, but losses will remain lower than in regimes without the kind of price controls that New Zealand has.

So, if there is a case for banning DTC advertising, it would seem weaker here than elsewhere.

It's also not completely clear that DTC advertising is all that bad. Calfee, Winston and Stempski (2002) find that DTC advertising of statins did not result in any increase in statin prescriptions but seemed instead to have increased the proportion of those on statins whose treatment was successful; they interpret this as that patients on statins were more likely to comply with doctor's orders on their statin prescriptions due to all the happy statin people on the ads. Further, de Frutos, Ornaghi and Siotis (2013) find that better drugs are advertised more heavily; likelihood of flipping to lower-quality drugs then is lower. Jayawardhana (2012) finds that DTC advertising, at least in cholesterol drugs, increases consumer welfare through its informative role: patients who hadn't realised that they ought to see a doctor about a condition turn up at the doctor's office.

In short, there's a pretty big literature on the actual effects of direct-to-consumer advertising of drugs. It's far from obvious that banning it is a good idea, and, in particular, that it would be a good idea here given the structure of our pharmaceutical market. A post on SciBlogs calling for such a ban could profit from some interaction with the literature; one online ad for a drug that could be less effective than some alternatives hardly seems sufficient basis for calls for such a broad policy change.

Obesity and mortality revisited

The obese cost public health systems less in the long term because they die earlier.

And now it looks like those who are merely overweight rather than highly obese actually live longer than those who are of normal weight. JAMA reports that only categories 2 and 3 in the obesity rankings are associated with higher mortality risk; the overweight have a mortality risk of 0.94 compared with normal-weight individuals. From the study:

This study presents comprehensive estimates (derived from a systematic review) of the association of all-cause mortality in adults with current standard BMI categories used in the United States and internationally. Estimates of the relative mortality risks associated with normal weight, overweight, and obesity may help to inform decision making in the clinical setting.

The most recent data from the United States show that almost 40% of adult men and almost 30% of adult women fall into the overweight category with a BMI of 25 to less than 30.¹¹¹ Comparable figures for Canada are 44% of men and 30% of women¹¹² and for England are 42% of men and 32% of women.¹¹³

According to the results presented herein, overweight (defined as a BMI of 25-<30) is associated with significantly lower mortality overall relative to the normal weight category with an overall summary HR of 0.94. For overweight, 75% of HRs with measured weight and height and 67% of HRs with self-reported weight and height were below 1. These results are broadly consistent with 2 previous meta-analyses^114- 115 that used standard categories. In a pooled analysis of 26 observational studies, McGee et al¹¹⁴ found summary relative risks of all-cause mortality for overweight of 0.97 (95% CI, 0.92-1.01) for men and 0.97 (95% CI, 0.93-0.99) for women relative to normal weight.

If the healthists keep talking about high proportions of the population who are overweight and obese, but it's only the heaviest cohort within that group that experience increased mortality risk, and that group is only a small portion of the overall category we keep hearing about in the paper, why add the overweight and the category 1 obese to the tallies? To get bigger numbers and fuel perception of a crisis. Timandra Harkness explains [HT: @cjsnowdon]:

The reason this unassuming paper drew howls of outrage was the same as the reason the benefits of moderate alcohol intake are never noted without criticism: it spoils the headline health message that Fat is Bad.

Even worse, it blows the cover on the great myth – that an epidemic of Bad Fatness is sweeping the developed world. By including the dangerously obese, the innocuously tubby and the healthily plump in one category, ‘overweight including obese’, 60 per cent of the English population are labelled as potentially At Risk.

Being At Risk means these people need guidance and protection from their own vulnerable state, from the temptations of our obesogenic world and the frailties of their own sugar-addicted brains. At such a time of national peril, no measure is too extreme.

But less than a quarter of English adults are obese, according to new figures released just before Christmas, a fraction almost unchanged since 2007. And the ‘morbidly obese’ category – BMI over 40, the ones for whom it really might be worth shedding a few pounds, medically speaking – also remains steady since 2009 at 2.5 per cent of the UK population.

If only one in 40 of us is in significant weight-related danger, why do the other 97.5 per cent of us need to be protected by the state against sugary cereals and fizzy drinks? Could it be because only a few of us have fallen, but all of us are in peril? Weak, foolish and easily led astray, we need to be frightened back on to the right path. Thus Tam Fry, spokesman for the National Obesity Forum - who has called for children to be monitored from birth for signs of obesity - told the Independent: ‘If people read this and decide they are not going to die… they may find themselves lifelong dependents on medical treatment for problems affecting the heart, liver, kidney and pancreas – to name only a few.’

I suppose that an alternative hypothesis would be that some folks find the obese to be aesthetically displeasing and prefer to base policy interventions on a purportedly paternalistic basis than on an externality-via-aesthetics argument. The latter is more economically defensible, provided that we expect Hollywood et al get things roughly right about what sorts of actors more people prefer looking at, but harder to defend in popular forum. I'd also expect that since the morbidly obese suffer wage and health penalties already, any incremental Pigovean aesthetic tax added to the mix wouldn't substantially affect things.

Tax maximisation, smoking, and the Stalin Gap

If my lifestyle and leisure choices lead me to remit less to the government in taxes than I would have under alternative scenarios, have I imposed an externality on the State?

James Meanwell asks:

Eric, care to weigh in on a debate I'm having about this elsewhere? Specifically, does loss of tax revenue as a result of lower productivity (e.g. due to smoking, eating too much) count as an externality? I've argued that the government would have to be spending efficiently, which is unlikely, for the loss of revenue to count as an externality and so it probably doesn't (count). Not sure if that's right, but the notion (i.e. loss-of-revenue-due-to-lower-productivity-as-externality) seems odd to me.

I started replying to his comment, but reckoned it deserved its own post.

Let's start with the big picture and work down to details.

Consider two people, alike in relevant ways at age 10 and equal in earnings potential, but with different utility functions. So they make different choices.

Mr. A decides that the rat race isn't for him and decides instead to take a part-time job at 20 hours per week instead of 40. Were he to have worked a full time job, his earnings would have doubled and, because of progressive taxation, his tax payments would have more than doubled. But he's not on welfare; he just can transform relatively little income into a fair bit of happiness because he really likes leisure.

Mr. B does not enjoy sitting idle; he consumes his leisure by smoking while working a full-time job. Associated health issues reduce his productivity and, as consequence, he earns a quarter less than he otherwise would; his tax payments are then perhaps a third lower than they otherwise could have been. Other sources have a lower wage penalty for smoking; we'll stick with a big one for present purposes.

If Mr. B's lower tax payments because of his choice to smoke are of policy consequence, then so too are Mr. A's lower tax payments because of his choices. Indeed, we could say that Mr. A is far worse than Mr. B: while Mr. B pays, in New Zealand, about three times as much in tobacco excise as he'll cost the public health system and is so kind as to die before costing the superannuation system very much, Mr A pays zero tax on his leisure and will earn two-thirds of the national average wage in his retirement despite having contributed relatively little to the superannuation system.

If we need to use policy to nudge Mr. B into smoking less, because of reduced tax earnings, then we also need to nudge Mr. A into working harder. And when nudges don't work in tobacco and start becoming shoves, we need to start shoving Mr. A as well.

Mancur Olson argued that Stalinist Russia had the world's most effective extractive tax regime. Workers were effectively compelled to work by near complete inframarginal taxation combined with very low taxation at the margin. If Stalin had had the ability to solve the Socialist Calculation Problem, he could have done slightly better, leaving each worker with an individualised menu of two choices: starvation, or a personalised bundle of very hard work and some goods leaving the worker epsilon better off than under starvation. I suppose that we could consider any deviation from that level of work as a harm imposed on the state. But it's only Stalin who'd really want to push there.

The Okun Gap is the difference between potential and realised GDP due to excess unemployment. I'll call the Stalin Gap the difference between an individual's potential maximal tax payments and his actual tax payments based on his choice to consume leisure over labour - partially because he would choose some leisure even in the absence of taxes, partially because too high of income tax rates yields substitution to leisure.

Most of us could earn more, and consequently submit higher tax payments, by choosing more labour and less leisure. But we'd be less happy.

So that's the big picture: the world in which the smoker's lower income tax payments (ignoring his much much higher excise tax payments) are sufficient basis for taking away his leisure is one where we want to penalize people for taking holidays or failing to work as many hours as they otherwise could: closing the Stalin Gap. Unless we say that leisure via time off relaxing is, by assumption, good, while leisure via smoking is bad - but that remains question-begging.

Smaller picture: is this even an externality?


Short answer: likely, but likely very small, and that small portion mostly because of how the tax system treats poor people.

All right. An individual chooses between smoking, leisure and labour. In a world with private health care and no taxation, the individual optimally balances health harms from smoking against enjoyment of smoking - he earns less because he smokes, but that's just part of the full cost of tobacco that he enters into his optimisation. All you behavioural guys who want to complain about whether he can be rational or informed on this can shut up for the moment - we're trying to figure out whether he's imposing an externality on the government once we move to a tax regime, so the behavioural stuff is entirely beside the point.

Some optimal level of smoking will be found above. What happens when we add taxation and government? The smoker will bear fewer of the wage costs of smoking because the government takes a portion of his earnings and so he should optimally smoke more. But again, the same is true of the individual's choice to consume other forms of leisure in the presence of income taxation. Recall that in economics, we don't care about externalities because of pecuniary effects like "the government gets less in tax". We care about them rather because they distort choices: people move from taxed labour to untaxed leisure in the presence of income taxation. The incremental increase in smoking when the returns to labour drop under a taxation regime can be viewed as a distortion. But, again, think of anything that helps increase the marginal utility of leisure. In a world with taxes and government, people choose more days off playing cheap but excellent video games relative to the zero-tax world. What then is the productivity cost of video games? Or of any other kind of leisure? It's hard for me to see any productivity externality of smoking that is different in kind from any other labour-leisure distortion generated by taxation. And it would take some number crunching to show that the technological portion of any effect* here isn't already over-internalised by current levels of tobacco excise.

Gordon Tullock reminded us in 1998 that government produces externalities as well as solving some externality problems. The vast bulk of reduced income taxation accruing to government due to smoking could only be remedied by imposing harms on smokers that are larger than the potential gains to government. Now, if you want to assume that smokers are irrational and hurting themselves by their choice to smoke, you can do that, but you don't really need the effects on income taxation to make the case.

Recall that smoking is concentrated among poorer cohorts and that marginal tax rates, though not average tax rates, are very high for the poor. If the deadweight costs of high marginal tax rates are making poor people smoke more than they otherwise would because the personal income losses are low, they're probably also screwing up a whole lot of other choices that are of greater consequence as well. If you're going to worry about it, start by trying to fix the tax schedule and abatement rates for the various income-contingent benefits so that the effective marginal tax rates facing poor families are not insanely high.

The Ministry for Social Development noted that 35% of beneficiaries (people receiving benefits other than just Working for Families, NZ's EITC) in paid work in 2008 enjoyed effective marginal tax rates higher than 75%, with some non-beneficiary low income families enduring abatement of the minimum family tax credit facing EMTRs over 100%. MSD concluded dryly, "Work incentives are very low for such families".

Effective marginal tax rates in excess of 75% are very likely to induce all sorts of very real distortions in behaviour; I expect the decision to smoke incrementally more because of reduced returns to wages is pretty trivial in this mess.



* Again, we don't care about externalities that are pecuniary. Imagine that the smoker smokes exactly as much under a tax regime as under a no-tax regime. The government earns less than it would were the smoker a non-smoker, but this is purely pecuniary: the gain to the government by forcing him to quit would be overmatched by the losses experienced by the smoker. The only portion that can matter for welfare is the excess smoking induced by the lower return to labour under the tax regime. And that's unlikely to be large relative to the amount of smoking that's invariant to income tax rates.