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A Spicy Stew of Economics, Politics, Data, Food, Carpentry, etc.
Wednesday, August 31, 2005

Compare and Contrast

A while back, Jane Galt quoted a passage that caught her eye from a National Review article about Germany:
Indeed, to Schroeder's eye, there is hardly anything worth cutting, right down to the generous dental benefits. "“I do not want to return to an era when you can judge someone'’s wealth by the state of their teeth," ”he observed.
Galt thinks the poor get pretty fine dental care in the U.S., pontificating:
The reason that I comment on this is that one thing you can't tell people's wealth by, in the dog-eat-dog dystopia that is America, is their teeth. Their sports gear, their vacations, their choice of dinner spot, yes, but not their teeth, at least not where I am.
Instapundit Glenn Reynolds found the whole thing pretty funny. Galt's post caught my eye too, because it seemed pretty callous and uniformed. Out of sight, out of mind, say Galt and Reynolds. Last week, the unblinking Malcolm Gladwell supplied the perfect rebuttal in a fascinating New Yorker article about health care in America.
Several years ago, two Harvard researchers, Susan Starr Sered and Rushika Fernandopulle, set out to interview people without health-care coverage for a book they were writing, "“Uninsured in America."” They talked to as many kinds of people as they could find, collecting stories of untreated depression and struggling single mothers and chronically injured laborers--and the most common complaint they heard was about teeth. Gina, a hairdresser in Idaho, whose husband worked as a freight manager at a chain store, had "a peculiar mannerism of keeping her mouth closed even when speaking." It turned out that she hadn't been able to afford dental care for three years, and one of her front teeth was rotting. Daniel, a construction worker, pulled out his bad teeth with pliers. Then, there was Loretta, who worked nights at a university research center in Mississippi, and was missing most of her teeth. "They'll break off after a while, and then you just grab a hold of them, and they work their way out,"” she explained to Sered and Fernandopulle. "“It hurts so bad, because the tooth aches. Then it'’s a relief just to get it out of there. The hole closes up itself anyway. So it'’s so much better."”


If your teeth are bad, you'’re not going to get a job as a receptionist, say, or a cashier. You'’re going to be put in the back somewhere, far from the public eye. What Loretta, Gina, and Daniel understand, the two authors tell us, is that bad teeth have come to be seen as a marker of "“poor parenting, low educational achievement and slow or faulty intellectual development."” They are an outward marker of caste. "“Almost every time we asked interviewees what their first priority would be if the president established universal health coverage tomorrow,"” Sered and Fernandopulle write, "“the immediate answer was '‘my teeth.'"”
Like Galt and Insty, I also rarely (but not never) see people with really bad teeth. No doubt like them, the poorest people I regularly come into contact with are behind the cash register or sweeping the floors. I don't ride the early-morning bus with home health care aides or spend much time in slaughterhouses with poultry workers. But unlike Galt and Reynolds, I don't assume because I rarely see it in my day to day life that a problem doesn't exist.

Monday, August 29, 2005

Vioxx: Excess Deaths, Excess Liability?

In the reporting about Vioxx, I've seen a lot of citations of epidemiological estimates of the excess deaths and heart attacks, which range from 35,000 to 160,000. I've also seen a lot of estimates of Merck's potential liability, which are said to range from a few billion dollars up to $50 billion. But I haven't seen any estimates of the figures you'd actually need to estimate the potential liability. It seems to me that the relevant figures are simply deaths, not "excess" deaths.

"Excess" deaths are something of a statistician's fiction. It's not like there's any clear method to distinguish someone killed by a Vioxx-induced heart attack from a Vioxx user who would have had a heart attack anyway. To see what I mean, consider the estimates of David Graham, the FDA whistleblower-scientist.

Graham finds that about Vioxx users suffered heart attacks (fatal and not) at a rate of about 8 per 1000 person-years. Those using other anti-inflammatory drugs had a rate of 5 per 1000 person-years. The difference, 3 per 1000, is an estimate of excess heart attacks (it's not actually the estimate Graham uses, but it's close).

Since, Vioxx was used for about 10 million person-years, we get:
80,000 heart attacks among Vioxx users
50,000 heart attacks among similar patients using other drugs
which implies 30,000 excess heart attacks.

The final number (30,000) is what the epidemiologists focus on, and what gets reported in the newspapers. But the total number of heart attacks (80,000) is the relevant count of legitimate lawsuits. It's not like the coroner can examine the blood clot clogging somebody's arteries and look for Vioxx molecules. Although randomized trials have shown that Vioxx raises the likelihood of heart attacks, they don't tell us which particular Vioxx user died because of the drug, and which ones would have died anyway. So Merck's potential liability is awfully big (I'm shorting their stock).

From the point of view of economic efficiency, I think Merck is going to end up paying too much, even leaving aside any bogus lawsuits that are filed. Merck ought to be liable for the excess heart attacks and other diseases they caused, not the illness that would have occurred if Vioxx had never been invented. But even though only about a third of the heart attacks suffered by Vioxx users were actually caused by Vioxx, there's no way to tell which are which. So Merck will probably end up paying for all of them.

I don't see any way around this, except for dividing the court awards by three, which might not be such a bad idea.

Friday, August 26, 2005

Vioxx Verdict: AEI Cries "Junk Science"

Predictably, conservative "tort reformers" are now proclaiming that the Vioxx verdict -- finding the makers of the popular painkiller liable for the death of a patient -- is nothing but "junk science." It's testimony to the power of a conventional narrative that anyone can make this claim with a straight face.

As I blogged a couple days ago, there's pretty overwhelming evidence -- including two large, randomized trials (the VIGOR and APPROVE studies) -- that Vioxx causes heart attacks. Even a layperson can easily verify the medical consensus by reading editorials in the most prestigious medical journals, which express no doubt.

But the American Enterprise Institute's John Calfee claims to know better than the medical journal editors, writing, "junk science now threatens to reign supreme in drug litigation."
The lawyers had to surmount the views of FDA and Canadian expert panels that Vioxx was safe enough to return to the market; evidence that, to the extent that Vioxx was dangerous, it wasn't necessarily any more dangerous than other drugs; and the inconvenient fact that the deceased in the case had died of heart arrhythmia, a cardiac problem not associated with Vioxx.
But none of Calfee's claims are true. Yes, the FDA expert panel did vote 17-15 to return Vioxx to the market, but

"Many of the panel members who were among the narrow majorities approving continued marketing of Bextra and Vioxx did so only with the stipulation that severe restrictions be imposed on their uses," according to one panel member, who added that "he expected that the uses of the drugs would be confined to very limited patient populations."
The transcript of the meeting is online, so it can be easily verified that this is an accurate description of the discussion. Vioxx does have some advantages over other drugs, but the experts say its dangers mean that it should be used at low doses, for limited times, on patients with a low risk of heart disease. In other words, it should be a niche drug, not a multi-billion dollar blockbuster drug.

Yes, the FDA, possibly being overcautious, suggested that alternative drugs like Advil and Aleve might be just as dangerous as Vioxx, but this is just an educated guess, not something based on strong evidence. As Calfee himself points out, "Advil and older prescription and over-the-counter arthritis treatments...[have] not been subjected to long-term clinical trials like the one that seemed to reveal heart problems with Vioxx." If you look at the FDA panel transcript, you'll see that many panel members suggested that Vioxx should only be used after the over-the-counter remedies have failed.

Yes, the doctor who performed the autopsy did find the cause of death to be arrhythmia rather than a heart attack. But that same doctor ended up testifying for the plaintiff that it was a heart attack that triggered the arrhythmia! And University of Michigan pharmacology professor Benedict Lucchesi, "who has studied heart arrhythmias for more than four decades," testified that Vioxx "contributed significantly" to the death.

In other words, Calfee and the "tort reformers" think the views of a pharmacology professor at a top university, the FDA advisory panel, and the editors of major medical journals are "junk science." With the whole medical establishment in the wrong, it's hard to imagine where we can find any "sound science." At the American Tort Reform Association and the AEI?

Wednesday, August 24, 2005

The Evidence Against Vioxx

Blogging UCSD economist James Hamilton waded into epidemiology yesterday but appears to have been dragged under by the libertarian Reason magazine. Hamilton devotes most of his post to arguing that "studies suggest but can't prove" that Vioxx causes heart attacks. Hamilton is concerned about a recent jury verdict that found manufacturer Merck liable for the heart attack death of a Vioxx user.

Before going into the specifics, it's worth noting that the editors of the top medical journals don't share Hamilton's doubts about Vioxx's harmfulness. Lancet is the most vociferous:
"The licensing of Vioxx and its continued use in the face of unambiguous evidence of harm have been public-health catastrophes." [Lancet editorial, requires paid registration]
I've put excerpts from the JAMA and NEJM editorials at the end of the post.

Why are these editors so sure that Vioxx causes heart attacks? Because, unlike Hamilton, they don't rely on only one study [the link is to the free, preliminary version. Published version here.]. Since Vioxx was approved in 1999, studies have been piling up demonstrating the harmful effects of Vioxx. The best of these studies (because it was a randomized trial) found that Vioxx nearly doubled the risk of heart attack compared to a placebo.

Hamilton's most misleading statement is that Vioxx causes a "1 in 4,000 risk of dying from a heart attack." The casual reader might fail to notice that Hamilton says "dying from a heart attack," not having a heart attack. In fact, the FDA study Hamilton discusses says that 1 in 75 of those using Vioxx at high doses will suffer a heart attack due to using the drug (and 1 in 397 of those using low-dose Vioxx). These are "excess" heart attacks, in addition to those the patients would normally suffer. Before Vioxx was pulled off the market, it was pretty commonly used at high doses -- 18% of prescriptions, according to the FDA study.

Why the difference? Why does Vioxx seem to cause heart attacks but not deaths from heart attacks? Well, there probably is no difference. It seems much more likely that the issue is simply that many people survive heart attacks, so studies examining deaths rather than attacks will simply have a smaller sample, and so be unable to prove much of anything. In addition, the Vioxx studies have relatively short follow-up periods, mostly two years or less. Longer studies would be needed to observe the fatal second (third, fourth, ...) heart attacks.

Ultimately, Hamilton is upset that a jury is responsible for "evaluating the scientific merits of statistical evidence." While jury trials may not be the perfect system, in this case the 12 members of the Vioxx Jury managed to come to the right conclusion.


Editorials in Top Medical Journals
The recent withdrawal of rofecoxib from the market because of adverse cardiovascular events identified in the unpublished Adenomatous Polyp Prevention on Vioxx (APPROVe) study has raised major concerns about the undue control of industry over postmarketing safety data. Topol pointed out that although he and his colleagues published a clear warning about the cardiovascular toxicity of rofecoxib in 2001, the FDA never insisted on a trial to determine the extent of the problem and the manufacturer countered with a "relentless series of publications . . . complemented by numerous papers in peer-reviewed medical literature by Merck employees and their consultants." [Jama Editorial, requires free registration]
The Adenomatous Polyp Prevention on Vioxx (APPROVe) trial, a study of patients with a history of colorectal adenomas, was stopped early because rofecoxib doubled the risk of major cardiovascular events (relative risk, 1.92; 95 percent confidence interval, 1.19 to 3.11). These findings confirmed the increased risk of myocardial infarction previously seen in the Vioxx Gastrointestinal Outcomes Research (VIGOR) trial [NEJM Editorial, requires paid registration].

Monday, August 08, 2005

It's Zucchini Season!

Zucchini and other summer squash are in season right now and I've been experimenting with Zucchini pancakes. You didn't know you could convert squash into pancakes? Neither did I, but they're quite good.

The goal is to get the zucchini to brown and stay crisp. But the zucchini is full of water, so it wants to steam. One could attack this problem by salting the zucchini, draining it in a colander for half an hour, and finally squeezing out the water. But that's too time-consuming. Also, salting and draining is supposed to make the squash less bitter, which I consider a drawback.

So instead, you grate the zucchini coarsely and mix in some cornmeal (or flour or minute-oats or some other starch). The ratio I've been using is about two tablespoons of cornmeal to 1 medium squash, but it doesn't matter much. The cornmeal absorbs the water and binds the zucchini into a patty. If you saute the patty at this point, you tend to get cornmeal mush with crunchy zucchini embedded in it: the mush seems to protect the vegetable.

This mush is actually pretty good, but I haven't succeeded in browning it. To get a pretty, browned, pancake, you need to stir in a beaten egg too. Oh, and you need more oil than the thin coat you'd use for sauteing. The celebrity chef Emiril has a recipe for Zucchini Bam! cakes along these lines.

And that's how you take a wholesome vegetable, and it a few simple steps turn it into something attractive and delicious, and still maybe somewhat healthy.

Wednesday, August 03, 2005

Is Zoning Causing a Housing Affordability Crisis?

Everyday Economist Steve Landsburg wrote one of his better columns in Slate last week, eschewing his usual attempts to push neoclassical economics to the point of absurdity. Instead, he summarizes a recent empirical study Urban Economists Edward Glaeser and Joe Gyourko. Writing in the Cato Institute's Regulation, G&G argue that
If policy advocates are interested in reducing housing costs, they would do well to start with zoning reform. Building small numbers of subsidized housing units is likely to have a trivial impact on average housing prices (given any reasonable demand elasticity), even if well-targeted toward deserving poor households. However, reducing the implied zoning tax on new construction could well have a massive impact on housing prices. [A somewhat more technical paper is available too]
Glaeser & Gyourko's argument is mainly empirical: they claim to be able to split land prices up into two components: the fixed cost of acquiring a parcel of land, and the marginal cost of an additional square foot. Landsburg calls this fixed cost the "mystery component," and summarizes G&G's argument pretty well:
When you buy a house, you're not just paying for the land and construction costs; you're also paying for a building permit and other costs of compliance. You've got to get the permits, pass the zoning and historic preservation boards, ace the environmental impact statement, win over the neighborhood commission, etc. If Glaeser and Gyourko are right, that's the mystery component right there.
I'm fairly sympathetic to this idea. These kind of regulatory costs surely drive up the price of housing in some places, especially in the exurbs, where zoning can restrict minimum lot sizes to 10 acres or more.

Unfortunately, G&G aren't talking about the exurbs or even the suburbs, they're talking specifically about big cities like San Francisco and Dallas. There are certainly restrictions on building in central cities too, but there are also a lot of other possibilities for the "mystery component" of land prices.

The most obvious candidate the "mystery component" of land prices is just the pre-existing housing stock, which is going to impose a lot of constraints on any new construction. One can't simply tack on an extra story to an old building because land prices are high.

If you want to replace a single-family home with three townhouses, you have to tear down the existing house first. Even with a vacant lot, builders have to do a careful survey to avoid cutting underground utility cables and pipes, and to avoid building on land with toxic waste like a leaky underground oil storage tank. And of course, just finding a vacant lot in big built-up cities is costly and time consuming. Not to mention that building one infill house at a time is more expensive than building house as part of a large tract of new homes.

All these drive up the price of housing. And they're also all probably captured in G&G's "mystery component" of land prices, because they're all fixed costs. They're start-up costs that need to be paid before construction can begin, and that don't vary much with the size of a lot. It costs the same to tear down an old house whether or not it has a big yard.

So, there's at least some reason to think that G&G's promise of a "massive" drop in house prices from weaker zoning is exaggerated. But even if they're right, it isn't clear that weakening zoning in big cities is a good idea. Zoning is most needed precisely in big cities where people live close together. Sure zoning has costs but as G&G acknowledge -- at least in the more technical version of their paper, if not the Cato version -- zoning has benefits too.

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