Freedom, and meth

This is your brain on Sudafed

When I'm sick, I have a terrible obsession with Sudafed. It's like some sort of somehow-I-can-actually-breathe-and-function-on-a-normal-level miracle drug.

In yesterday's New York Times was an op-ed discussing the restriction of drugs with pseudoephedrine, which is one of the main ingredients of methamphetamine. After years of being available over the counter, then low levels of restriction implemented requiring purchasers to show an ID, the author believes Sudafed and other such drugs should only be available with a prescription.

Certainly he's right in saying that requiring prescriptions would cut down on meth creation. But it may be enlightening to examine the costs and benefits to society and to individuals.

Costs
Let's start with the costs of requiring a prescription, which intuitively lies with those of us who use these drugs for, you know, our noses. Economists would try to assess the new costs with a survey asking, in one way or another, how much it's worth to you to have Sudafed available without a prescription. For me, it's the cost of my time to go to the doctor, the cost of seeing that doctor every time I get a cold (my copay, if I've got insurance), then the cost of my time to wait for the prescription to be filled, etc. Now add those up for every user of Sudafed, and we have some general understanding of the costs to individuals who use the drug. (I over-dramatically refer to this part as "freedom" because it represents my ability to pursue something that I want without external interference.)

We also have to examine the costs to insurance companies for paying for my doctor's visit, the opportunity cost of a doctor (or nurse practitioner, or whoever) who has something significantly better to do than waste time writing me a prescription for the sniffles. And add to that the opportunity cost of time for a pharmacist or technician to fill a bottle with Sudafed.

Now, if Sudafed is that hard for me to get, I'm also less likely to get it as often. So another cost of that regulation is the lost revenues to the makers of the drug, which will be much less widely used when it's more costly (even in terms of just time) to get. And distributors like CVS will see decreased revenues from selling the drug. Add that to total costs.

Benefits
Some benefits are easy to point out just from our costs. Doctors have a few more visits (though not as many visits as there are people buying Sudafed now, since we will not buy it as often), and they get paid for that. Pharmacists are required to fill more bottles, and they get paid for that as well.

The big benefit, according to the article, is that meth will be much harder to make and therefore less widely used. This benefit could be pretty huge, considering that meth is one of the most harmful drugs out there (after heroine, crack and alcohol). But we have to assume that a percentage of people who use meth in the first place will steer their abuse to some other drugs that may be more or less harmful, so we must discount those benefits based on those decisions. The benefits include health care costs, increased wages from not doing meth all the time, property damages due to hotel room explosions, and some other hard-to-measure, easy-to-exaggerate effects.

Conclusion, and proposal
With almost any restriction policy, there are winners and there are losers. Often, the losers are those in society who benefit from the proper, unrestricted use of medication/alcohol/tobacco(/christmas ornaments?). The trick is figuring out whether the freedom to use them outweighs the potential benefits of the restriction.

Could we find a less restrictive way to keep meth manufacturers from getting the drug that would allow legitimate users full access?

What if we put a big tax on the drug, then offered a rebate from the tax pool that required identification in one source? This way, the costs to me are only marginally bigger (because I have to take the time to send in for the tax), but the cost to meth manufacturers are much higher, since they wouldn't be able to get the rebate; we would also avoid the "smurfing" problem that the NYT author points to as a loophole in the current system. Certainly it's imperfect, but it does at least have the added benefit of allowing sick people to use a drug for legitimate purposes.

Addendum

I've been thinking about my recent post on voting, and I'd like to add an addendum: I think people are more likely to vote if they identify as part of a group of people. In my equations, this would correspond to a higher value for "v," which increases the impact a voter expects to have on the outcome of an election.

There's certainly a better way to put this mathematically, but I haven't gotten around to revising that part yet. More to come!

Is it rational to vote?

So I wanted to write up a quick little analysis of why people go out and vote depending on their perceived impact of the election, their affinity for voting and the costs incurred by spending the time to do so. The exercise got a little lengthy, but I had fun with it nonetheless. It assumes an election between two candidates and no other questions on the ballot.

The document is embedded below (it's only 4 pages, so suck it up), and comments are always welcome!

As a follow-up: Is voting the only way to participate in our government? Is it the most effective way?


Vote

Let's trade crap!

You know what sucks? Advancements in technology. Paper money is totally evil, and we should probably do away with it because, as far as I'm aware, there was no such thing as evil before currency reared its ugly head right around 2000 BC.

Luckily for me, some folks in Durham, NC (shoutout!) are throwing a helpful event where I can just bring my junk, drop it off, and pick up someone else's junk. What a relief, as I usually have to rely on the dump for that sort of service.

Is "Free Market" a play on the fact that they're all hippies?

Sadly, I expect the organizers will just end up with a bunch of trash at the end of the day. (Helen, if you're reading this, I'm sorry I stole it off your Tumblr and am now totally ripping on it.)

In truth, it does sound like a fun enough event. Going back to a barter economy is something like participating in a Renaissance fair without dressing up like an idiot; you get to spend some time really understanding why we don't live that way anymore.

In fact, if I've got my economic history right, marketplaces like this - but with less worthless crap - were the way modern banks were sort of born in Venice. (Aside from pretty much all of China, Venice was the evolutionary capital of financial systems around the 14th century.) Instead of lugging around their giant sacks of gold and whatsuch, uber-rich Venicians would make a stop by the bench (in Old Italian, banca - hence "bank") where exchange counters hung out, drop off their gold for a deposit slip, and pay sellers with what was essentially a check on their account. Awesome, no?

In any case, people found it much easier to carry little slips of paper instead of, say, a bunch of goats or something. Funny how that idea caught on.

Planet Money is totally reading my blog...

Actually, that's probably not true. But they did have a quick discussion about the nature of the value of gold (see recent post, What's money worth?).

From The Friday Podcast: Gold!

"The guy who sells it to us says he doesn't know why it's worth anything at all. And a fund manager with millions of dollars invested in gold told tells us it's a mistake to try to make sense of it."

What's money worth?

Last week I listened to an interesting podcast from NPR's Planet Money in which four economists from Brazil saved the country from a horrible inflation problem. It was pretty fantastic, and I definitely recommend giving it a listen.

As you may already be aware, inflation is an increase in prices not because products get better, but because currency isn't worth as much anymore. It's common, but it can be terrible in big doses. Hyperinflation means the value of your money starts to drop off, making you poorer even if you still have the same amount stashed under your mattress.

Bad inflation can happen (and did in the case of Brazil and post-WWI Germany) when governments print too much money to pay off their debts. Essentially, since there's more money out there, it's worth less than it was before. So prices go up, and you're stuck with what's in your wallet.

In Brazil's case, prices were going up like crazy: 80 percent inflation per month. To cite PM's example, a $1 carton of eggs would cost about 2 bucks next month, and after a year, they'd be $1000. Check out the story for other interesting tidbits, but here's the spoiler: they fixed the currency by replacing it.

The interesting part is that it was all a trick; they replaced the old currency with a new one, and the pure fact that people were more confident in their currency meant it was worth more.

Enter crazies to inform us that it's for this specific reason that we need to be back on the gold standard, that our money is worthless, that it only has value because we say it has value. In the old days, you could actually trade your dollar bills in for gold and silver from the US Mint. But no longer. Well, joke's on you, crazies: gold is only worth what someone will give you for it. So is silver. So are diamonds. So is shiny, compacted moon dust. And so are dollar bills.

(Note: some non-crazies have debatably less empty arguments for why we should be on the gold standard, such as limiting the Fed's ability to manipulate interest rates. But we can get into that another time.)

Misunderstanding risk

(source)

Why are people so terrible at understanding risk and probability?

A few months ago, Walgreens had planned to begin stocking a DNA testing kit. You could swab your mouth and send off the sample to find out whether you have any genetic risk for certain diseases.

There's certainly value in finding out your statistical genetic risk for certain diseases. But as my good friend Tyler pointed out to me, not everyone would understand what to do with that information. He thought that while some people would be able to use the kit and take action depending on the outcome, others would completely misinterpret the results, which could theoretically be dangerous.

The problem is that people don't understand the probabilities and calculations that they're dealing with. It's not just uneducated people; everyone makes decisions that, given the statistics, seem completely irrational. The probabilities are complicated and sometimes very counterintuitive.

How do we get to the bottom of that problem? Teach more statistics? Write indecisive blog posts?