When you try to understand change, whether in economics or in the rest of life, one good rule is to ask what other factor or factors changed. To explain a change in one variable, we have to point to another variable that changed, not to one that stayed the same.
Asking what changed can lead us to reject some explanations and embrace others. Consider three examples: the recent California fires; cable television’s sudden decision to drop C-SPAN in the early 1990s; and the dramatic increase in heroin-related deaths.
These are the opening two paragraphs of Charles L. Hooper and David R. Henderson, “Economists Know: Ask What Changed,” the Econlib Feature Article for February.
Another excerpt:
The aforementioned Hill and Kakenmaster do point to one factor that has changed: the wildland-urban interface. Unfortunately, their data cover changes only up to the year 2000, but the period of bad fires started a decade after that. So has anything else changed dramatically lately?
Actually, yes. What has changed is precipitation. California’s three-year precipitation in 2011-2014 was the second lowest since state records were first collected in 1895, and normal precipitation levels haven’t yet returned. Trees are still suffering from the shortfall. The biggest change over the last decade isn’t temperatures or forest management—it’s a drought of historic proportions.
Read the whole thing.
READER COMMENTS
Alan Goldhammer
Feb 4 2019 at 6:24pm
David, you got the heroin story partially wrong. If you look at Figure 2 from the CDC link (your Reference 15), you see that the real dramatic increase is in fentanyl and analogues which has spiked dramatically. Fenanyl is far more potent than heroin and as a result much easier to smuggle into the US (it also can be easily synthesized by an enterprising organic chemist).
Charley Hooper
Feb 4 2019 at 8:16pm
That’s another “ask what changed” case that we didn’t delve into. The story of “other synthetic narcotics other than methadone” is a worthwhile one to study.
John Alcorn
Feb 4 2019 at 8:00pm
The three explanations are instances of John Stuart Mill’s Method of Difference:
The explanation of California’s forest fires and perhaps the explanation of the increase in heroin-related deaths are instances of Mill’s Method of Concomitant Variations, too; wherein the magnitude of an effect depends on the magnitude of its cause:
David Henderson
Feb 5 2019 at 8:53am
Great quotes. Thanks, John.
Todd Ramsey
Feb 5 2019 at 9:02am
The spike in opioid related deaths correlates with the reclassification of Hydrocodone from a DEA Schedule 3 drug, which can be refilled 5 times, to a Schedule 2 drug, which requires a new prescription for every fill.
Illicit imported fentanyl and its cousins, with potency not knowable to the user, are probably causing the rise in deaths. However, the increase in demand for the fentanyls is likely due to the reclassification of Hydrocodone.
The reclassification is a good example of good intentions producing bad outcomes.
Charley Hooper
Feb 5 2019 at 3:24pm
That’s a good point about hydrocodone painkillers, such as Vicodin, being rescheduled from III to II by the DEA. That would certainly be a factor helping boost heroin-related deaths. But the growth in deaths started in 2010, whereas the rescheduling happened at the end of 2014, suggesting that the OxyContin reformulation played a big role.
Jon Murphy
Feb 5 2019 at 10:48am
Great article. The opioid thing is interesting and should have been something I picked up on (a family member was on oxycontin for a surgery. When they tightened up on that, the doctor gave him a less effective med. He OD’d and died on fentanyl in 2014). It’s an unfortunately deadly case of the Law of Unintended Consequences.
Charley Hooper
Feb 5 2019 at 3:45pm
I’m sorry to hear about your family member.
Restrictions and prohibitions on drugs are the classic case of the Law of Unintended Consequences. Voters and politicians effectively say, “We don’t want people to suffer health problems from these drugs.” But what they do is put restrictions and prohibitions into place without addressing the underlying issue, which is that people want pain relief and/or to get high. By making it harder for people to get the drugs they want, that drug-seeking effort is simply diverted into other channels that usually offer drugs and transactions that are less safe. As a result, people suffer more serious health problems.
Jon Murphy
Feb 5 2019 at 4:37pm
Thank you.
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