Wednesday, February 22, 2012

Policy Endogeneity: Meth Edition

One of the reasons I get so frustrated about the ban on self-service gas in Oregon is that the general defense of the policy generally ends up as something along the lines of, "well, that's just the way we do it here and we don't want it to change." Which to me is the worst possible approach to policy, "because it exists, it should exist" is a tautology and not rational.

Policy makers should be just as eager to remove outdated, ineffective and misguided policy as to make new policy, but sadly, this is never the case.  Times change, society changes, we update old information and learn new approaches all the time.  This suggests that we should always be in the habit of re-evaluating past approaches and willing to change when things change or information changes.  But policy doesn't work like that, most policies create specific stakeholders who will resist change, while the removal of policy generally creates more diffuse benefits.

Which brings us to an interesting new study about Oregon's requirement that Pseudophedrine may only be dispensed with a prescription from a doctor.  The Cascade Policy Institute has released a study of the impact the requirement has had on the illegal manufacture of meth in the state.  They find that the requirement has not had a meaningful impact on the number of "meth lab incidents:"

...the number of seizures of labs, dumpsites, chemicals, and equipments that indicate local manufacture of methamphetamine. [sic]
Here is the main figure:

There are a number of challenges to the study that make causal statements difficult: for example, what other policies were also changing in this period, how was law enforcement changing, and so on, are questions that would need to be answered to raise confidence in this result.

In other words we don't know the counter-factual - what would have happened in Oregon in the absence of the requirement. For example, since Oregon had one of the worse meth problems early on, it is possible that there was a disproportionate law enforcement response.

Still, there is pretty compelling evidence to suggest that the prescription requirement did not make a major marginal impact. It appears that behind-the-counter laws enacted a few year prior in Oregon and neighboring states (and which is now federal law) may have been quite effective and that the additional prescription requirement was unnecessary.

Of course the new problem in meth is the shake-and-bake method of manufacturing it which is causing some serious problems with uninsured people, burned by this very dangerous method, showing up in burn wards of hospitals, further increasing the cost to society of this epidemic. This method uses much less Pseudophedrine and so behind-the-counter restrictions might not be enough going forward.

On the other hand there is a real cost to the prescription only policy to those that would use Pseudophedrine legally and for its intended purpose.  I, for one, am prone to sinus infections and Pseudophedrine is the best source of relief from the symptoms that can be quite debilitating.  Getting a prescription is a pain and requires an expensive doctor's appointment.  Even then, it is more complicated, because the doctor has to get a special prescription form - not the normal scrip - and it all has to go into a centralized database.  That said, decent alternatives exist and if I am really suffering, a prescription can be had.

So, all this is to say that I am not ready to declare that the prescription-only regulation should go, but that this is pretty good evidence that it should at least be examined to see if it is the best policy approach.  First and foremost for those who would see it abolished, I think, is to demonstrate that it is no more effective in reducing the shake-and-bake method of manufacturing.  I suspect that it may be, but by how much?


ericfruits said...

I'm not how one's insured status affects the costs to society of getting burned cooking illegal drugs.

Seth Woolley said...

The is-ought fallacy is not a tautology. It is still irrational, but a tautology fallacy is when a conclusion merely restates a premise and provides no new information and still requires the premise to be substantiated. Valid but unsound is the problem with tautological reasoning. Is-ought is the disconnect between something existing now and whether or not we should continue doing that. In that case the premise is true but the reasoning is invalid. The Cascade Policy Institute is not a trustworthy source, either. I stopped bothering even reading their illogical arguments a long time ago. In this case maybe they have a point that restrictions are now so successful that some of the most stringent ones should be lifted, but I am not sure they are measuring success very well here. I am for decriminalization in general, but this fails to convince a skeptical reader. Eric is also correct. Being insured via public vs private means creates the same total cost either way.

Patrick Emerson said...


your are correct. social cost is independent of insurance status.


If the existence of a policy means it should exist and thus the absence of a policy means it should not is tautological reasoning...I think.

Dann Cutter said...

I think the mistake here is to assume that we would see a sudden and noticeable spike. Short period, too many confounding factors bias any reasonable data indicating whether this measure has been effective or not. (I swear there was a question on last night's exam almost exactly like this on single mothers and TANF)

What can be said is that the Meth market shifted - however, only upon a correction of that shift could we reasonably see if this regulation has its intended effect. Since the stated goal of law enforcement is to correct this supply shift - and since having the regulation in place (like Oregon's pioneering bottle bill) can provide a leveraging effect on other states to follow suit, as law enforcement makes trafficking more difficult, we may see the more substantial shift as local production supplies become an issue again.

We must consider that if the market shifts again (which is it likely to do), the benefits of being an early adopter might outweigh the short term effects of inconveniencing those few patients for which Psuedophedrine is the preferred drug of choice.

The premise of your argument is that policy makers should move more swiftly in considering these issues. I would argue that given the number of issues and the above uncertainty, that only by looking at the policy over a long period can we really provide meaningful conclusions into the effectiveness in terms of real world harm vs benefit. Given limited resources in terms of policy analysis - consideration should instead go to issue that have been in place long enough to provide said data, or in which clearly defined failures have arisen.

With many substitute goods (frankly, most safer in terms of side effects etc), I am not certain that it could be effectively argued (outside of certain drug makers) that the restrictions cause significant harm to the general social welfare greater than revealed preference benefit (most people indicate a personal value in fighting meth proliferation).

In other words, much like the argument against self service, if people value their perceived efforts via supporting regulation (whether it means keeping gas attendants employed or making meth ingredients hard to come by) gives them self satisfaction, then they will place the regulation as a higher utility than the unrestricted solution. (i.e. (and please let me have interpreted this correctly) we have shifted away from the competitive equilibrium point closer to the social-welfare maximizing point).

Finally, the report's data is looking at 2004 on, which is similar to grabbing the data from the early 90s on crack cocaine usage (missing the rise in the 70s and 80s). It biases results to look more (and less) significant than they are, when including late nineties data would paint a very different picture of the battle against meth. Again a time period bias issue.