#100wordreview – The Cost Disease (William J Baumol) [Book]

The rising cost of healthcare is a global phenomenon. Why? Because the relative productivity of labour intensive industries inevitably – and inexorably – declines. Computers get cheaper; healthcare doesn’t. It’s a simple idea, now proven by historic data and in need of appreciation. The cost disease allows – encourages, even – affordable increases in spending on health. Though incisive, Baumol’s book inevitably labours this central argument. But to understand trade-offs in public spending you need a firm grasp of the cost disease. This book provides a means to that end, and delivers important context for any discussion about healthcare, education, economics and politics.

Amazon / Wikipedia / Yale University Press

The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t

Paperback, 288 pages, ISBN 9780300198157, published 18 October 2013

Economics: the death of a discipline

John Kay recently wrote an article titled “Economists: there is no such thing as the ‘economic approach’“. If Kay is right, and there is no ‘economic approach’, then to what extent is there a discipline of economics? To what extent is there economics at all? Here are my thoughts on the issue*.

In my field, a distinction has been made between economics as a ‘topic’ and economics as a ‘discipline’ (e.g. here and here). While the latter is (if it ever existed) doomed, the former might be salvageable.

The discipline

Most of us will agree that although there are overlaps between economics and other disciplines, the lines of analytical demarkation are sufficiently clear for us not to be in much doubt about the differences between the disciplines.

Culyer (1981)

While this may have just about held true 30 years ago, I do not believe it to be true today. For me, the economics of suicide (to which Kay refers) represents the suicide of economics. Gary Becker’s The Economic Approach to Human Behavior was an important milestone. One can look at Becker’s 1992 Nobel Memorial Prize as something of a watershed; though he is preceded largely by ‘proper’ economists studying explicitly market-based phenomena, he is succeeded by individuals who have achieved breakthroughs in mathematics, statistics, psychology, moral philosophy and history.

Do not get me wrong, this is a very good thing. It represents the success of interdisciplinary research and in particular the application of the scientific method to all aspects of life, and we are all the better for it. Outside economics, this conflation of science and social science is leading to painful lessons about the impossibility of quantification in certain aspects of human nature and social interaction (here is one recent example), but economics is the most vulnerable.

The discipline of economics is in a strange state of simultaneous ascendency and yielding. It is ascendant in its influence over any policy analysis and its application to all aspects of life. The reason for this occurring is clear; every action – human, animal, governmental, societal – relates in some way to the allocation of scarce resources. Wiktionary definition of economics reads: “(social sciences) The study of resource allocation, distribution and consumption; of capital and investment; and of management of the factors of production.” And herein lies the problem; as we approach the lowest common denominators of knowledge, these issues are increasingly explained by other better-defined and time-tested disciplines. I am left wondering, over what does the discipline of economics have a monopoly?

The topic

Economics could survive in our lexicon as a topic. This topic is macro. The topic of microeconomics, it seems to me, can be entirely subsumed by other topics. Microeconomics is largely about agents. Humans are agents. The behaviour of these agents is primarily studied by psychologists, sociologists, ethicists, anthropologists, geographers and others, depending on scale. Firms are also agents. Firm-specific topics can reside in the realm of business studies – a far more modest subject than economics. Though an economist’s toolkit is undoubtedly of value to each of these disciplines, it is unclear which tools are exclusively those of the economist.

Inflation, unemployment, trade, growth. Economics may be saved by these topics – they will at least remain under the economics banner until its final day. But they are not safe. Each can be explained by their microfoundations in some combination with political science, philosophy and meteorology. Furthermore, marketisation and the spread of free markets means that society and the economy are now one in the same. One cannot be a quantitative social scientist without straying into the topic of economics. As such, it becomes unclear which topics are exclusively those of economics.

The choice

In my opinion, the primary value of economics today is its multidisciplinarity. But we already have a word for that. The inability of economics to restrain and contain itself is what will lead to its demise. Through its application to everything it will come to mean nothing. To my mind, economics has a choice. Either it can continue to expand itself into obscurity, or it can choose to restrict itself to the study of the economy and engage in the difficult task of differentiating (pun intended) the economy from society more generally.

No matter what, I suspect that economics has much the same destiny as natural philosophy. How long will it be before Economics degrees evaporate and we instead read Social Science? To be what was once termed an economist, one need simply sign-up for the BSc stream.

* This blog post is intentionally provocative, in the hope that people might engage with its content!

doi: 10.6084/m9.figshare.1101354

Reddit for academics

I’ve finally figured out reddit, and it’s a great tool for academics. You should really give it a try.

Over the past few years I’ve dabbled in reddit, failing to really ‘get it’. I thought it was just a place for silly GIFs and celebrity AMAs (Ask Me Anything), but I was wrong. It’s a place to share links to interesting internet stuff, but more importantly it’s a place where these links can be discussed. So if like me you’ve tried it before and failed to grasp it, or if you fancy giving it a go, here’s my suggested route in.

  1. Read this.
  2. Sign-up. Choose a username. You can remain anonymous if you wish.
  3. Go to reddit.com/subreddits and unsubscribe from any stupid subreddits to which you’ve been automatically subscribed.
  4. Go and find some subreddits to join. For academics I suggest academicpublishing, DepthHub and Scholar. And if you’re a fellow health economist, try academiceconomics, Economics, healthcare and HealthEconomics.
  5. Have a look at your homepage. By this stage it should be full of articles that interest you. Follow the links. Vote-up the ones you like. Join the discussion by commenting on them.
  6. Take a look at your preferences. They can alter the experience somewhat.
  7. Head over to metareddit.com to find more subreddits you might like.
  8. If you use Chrome, download the reddit companion.
  9. Start submitting your own links and comments to subreddits and watch the discussion unfold. You can submit links to academic papers, blogs, silly pictures… whatever you like!

A word of warning. DO NOT use reddit exclusively as a means of self-promotion. You will be Shadow Banned, as I have been. Stick to the rule of thumb of no more than 1 in 10 of your link submissions being some way self-promotional. The number of links you can submit is, in some secretive way, defined by your ‘karma’. You get karma by posting links and comments that other people like. Just be helpful and nice and you won’t fall foul of the reddiquette police.

New working paper – ‘The relationship between individual risk and cost-effectiveness in screening interventions’

I’ve just released a new working paper, along with my co-authors Profs Marilyn James and David Whynes. You can access it through RePEc here. The paper discusses the (somewhat obvious) relationship between a person’s risk of developing a disease and the cost-effectiveness of screening them. This is important because publicly-funded screening interventions will, in the future, I suspect, have to discriminate based on risk.

Here’s the abstract:

Advancements in our understanding of the causes and correlates of disease mean that we are now able to estimate an individual’s level of risk. This, and the ever-increasing need for healthcare interventions to be cost-effective, has led to calls for the introduction of risk-based screening. Risk-based screening would involve the use of information about an individual’s risk factors to decide whether or not they should be eligible for screening, or the frequency with which they should be invited to attend screening. Evidence is emerging that targeted screening, towards those at higher risk, can increase the cost-effectiveness of a screening programme. The relationship between individual risk and the cost-effectiveness of screening an individual is implicitly recognised in current population screening programmes in the UK. However, the nature of this relationship, and its implications for cost-effectiveness analysis, has not been presented in the academic literature. In this study we propose that an individual’s risk of developing a disease has a consistent and quantifiable relationship with the cost-effectiveness of screening them. We suggest a simple modification to standard methods of cost-effectiveness analysis that enables the incorporation of individual risk. Using numerical examples we demonstrate the nature of the relationship between risk and cost-effectiveness and suggest means of optimising a screening intervention. This can be done either by defining a minimum level of risk for eligibility or by defining the optimal recall period for screening. We suggest that methods of decision modelling could enable such an analysis to be carried out, and that information on individual risk could be used to optimise the cost-effectiveness of population screening programmes.

I’d really appreciate any comments you might have on this paper. Feel free to post below or alternatively please send me an email.

#100wordreview – Quack Policy. Abusing Science in the Cause of Paternalism (Jamie Whyte) [Book]


I found this IEA publication very difficult to read, because almost every paragraph is flawed; sometimes logically, often evidentially and at times morally. The book takes what any undergrad might learn in Econ101 and applies it to current challenges and policy responses in health and climate change. All with gusto and arrogance. Whyte has little regard for the policy context, or for much of economic thought from the last 40 years. Most arguments depend on false analogies, which are painful to read. In the author’s own words: “Science progresses by ignoring mere opinion, expert or otherwise”. Thank goodness for that.

#100wordreview – The Humble Economist (Tony Culyer) [Book]

A collection of 21 abridged essays summarising Tony Culyer’s most important contributions. Fellow health economists may have already read the book’s constituent parts, but much can be gained from digesting them in this form. The book presents Culyer’s work as a cohesive set of ideas, woven together in his unmistakable style and approach; best characterised by the book’s title. For non-economists interested in health research, the book disarms economics of its alienating features that lead to confusion and misunderstanding about what economists actually do and why they do it. For economists, herein lies an exemplar approach to your discipline.

New article – Generic Preference Based Measures: how economists measure health benefit

I was invited to write a short review article for Advances in Clinical Neuroscience and Rehabilitation, and it’s just been published in their latest issue. You can view the article online here.

The article gives a very brief introduction to the use of generic preference-based measures and highlights their use in relevant clinical fields such as stroke, multiple sclerosis and Parkinson’s disease.

ACNR is a professional journal distributed free to neurologists, rehabilitation specialists and allied professionals in the UK.