No 70: Cost benefit analysis of a heart drug

AN INTERESTING story in this week's press which fits in well with the work on CBA which we have been doing in AS lessons:

http://www.telegraph.co.uk/health/healthnews/7080111/Nice-should-allow-a-2-a-day-heart-drug-on-the-NHS-which-could-help-thousands.html

Deciding which drugs should be made available on the NHS is a very emotional issue. There's only a scarce amount of money to subsidise medicine and an opporunity cost in chosing to provide a particular drug (a few years ago there was a heated debate over whether the NHS should prescribe viagra).

The above story is about a drug that can prevent problems from an abnormal heart beat - something that affects about 40,000 patients a year.

It would cost £2 a day - or, for 40,000 people - just over £29 million a year.

Of course though, we economists know direct cash costs are not the only way of measuring costs and benefits. We could for example, look at the money we would save if this drug prevents people from needing a lot of health care later.

This argument is one used by those in favour of making the medicine available on the NHS:

"Trudy Loban, chief executive of the Atrial Fibrilation Association, said: “Paying out around £60 a month to keep a patient’s condition controlled is a small price to pay compared to the thousands it costs to treat every stroke suffered by an AF patient.”

She added that the yearly costs of treating those whose condition was not controlled by medication could run into hundreds of millions of pounds.

Around 16,000 patients with the condition have a stroke every year, of whom half die."

On the other hand, NICE (the National Institute of Clinical Excellence, the organisation that decides which drugs are provided by the NHS) argues that it is less effective and more costly than substitutes:

"When Nice announced that it had provisionally rejected the drug, Andrew Dillon, the organisation’s chief executive, said: “The manufacturer’s own data indicated that dronedarone was the least effective of currently used anti-arrhythmic drugs for controlling atrial fibrillation. 

“The drug is much more expensive than existing treatments and the evidence suggests that on balance it offers little additional health benefit.” 

He added that there was not enough information on the drug to accept that it caused fewer long-term side effects than other treatments"

Hopefully this story again shows you that the ideas of economics are not just for the classroom, They can help with making important real life decisions!

No 69: Guide to UK government spending 2008-09

AS REQUESTED, here is a link to the Guardian graphic and podcast about government spending.

If you are an AS student, I will be using this in classes in a few weeks, but it won't hurt if you want to watch it before then. As you can see from the screenshot, it is a thing of some beauty.

No 68: Presentation on fast food tax

THIS is the presentation we have been looking at in AS classes, posted here at the request of students.

Please let me know if you would like me to post any other teaching materials I have used, on this blog.

Bush Elasticity Final

No 67: All About Government Debt

IN MORNING A2 class today we covered the topic of government borrowing and debt. I showed a number of materials which we did not really have time to look at in detail.

1) Billion Pound o-gram

From the blog Information is Beautiful, this shows the size of the UK government budget deficit alongside other billion pound amounts so you get an idea of how big public sector borrowing has really been.

2) The UK National Debt Clock

This is a static image so it looks like the national debt has stopped growing. Sadly, the real UK national debt is increasing as each second passes. In 25 minutes during class today, it went up by £13,000,000. Click on this to get to the real clock:
http://www.debtbombshell.com/
Both scary yet funny (?!).....



3) Plans to reduce the budget deficit


Also from Information is Beautiful together with the Guardian, this shows the main political parties' plans so far to cut the deficit by reducing spending and raising taxes. Clearly, none of these plans will be enough. Equally clearly, we will have to wait until after the election to see the full range of measures taken by whoever forms the next government.

Enough to make you glad you aren't British, isn't it? (My Canadian nationality application has been started.....)

No 66: Forward to the future with the huge growth of the UK economy

THIS morning the Q4 GDP growth figures were announced, showing, as expected, a POSITIVE figure taking my country WELL out of recession by showing an increase of ....er.....


0.1%

This is how it looks on a graph:

It's quite easy to miss that small blue bar unless you are looking carefully.

Nonetheless, the longest recession in British history has now ended. Though it might start again soon.

Here a link to the BBC news story:

http://news.bbc.co.uk/1/hi/business/8479639.stm

and this short video has a lady in a field of yellow flowers (why?) talking about the news

This news clip from the BBC is about the problems that may still be ahead, even after today's statistics:

Note too the recent stories concerning unemployment - which fell from 7.9% to 7.8% - and inflation - which rose from 1.9% to 2.9% (CPI measure). This BBC page has loads of information so you can follow up on these events.

http://news.bbc.co.uk/1/hi/in_depth/business/2010/uk_economy

Again, the evidence here points to a slight recovery, but not yet

click here to see what a real recovery looks like

To end on a serious subject, every year the A-level examiners say that while students have good theoretical understanding, they lose marks because their knowledge of real UK and world economic events is poor. You need to know about both theory and reality to do well. Don't make the same mistake as many students - you need to read read read read read - and feel lucky you have a friendly blogger to help you do that ;-)

No 65: Geognos website

THIS website gives information about countries including a lot of useful economic info.

First go to the website and choose a country (here I am choosing Barbados).

At the top of the Barbabos screen you can see maps and photos and links to topics:

It's quite nice just to browse the photos, and as you do the map will show you where they were taken. However, if you want to get to the serious business of finding out Barbados's economy, click on the 'Economy' link and you will get to this:

All of which can help you to amaze your friends by, for example, telling them three really interesting facts about Barbados they never knew and never knew they wanted to know.

1. Russia is the 3rd biggest importer into Barbados
2. 75% of its jobs are in services
3. It only has 1 TV station

Perhaps some of you might like to post equally exciting facts about your or other country's economies.

No 64: Some leftover items

THINGS published over new year which I haven't found time to post before now.
First, here is an article reporting the most noteable statements about business and economics during 2009, with the following being the winner:

Vampire squids look like this:

Any of you planning to work for Goldman Sachs?

And here is a link to this BBC quiz

I got 10 out of 12. Can any of you so called top international students do better than that?

No 63: The end of Zimbabwe's inflation?

SOME OF you may have been following the story about Zimbabwe's economy.

In January 2009 its inflation rate was reported as being 6.5 Quindecillion Novemdecillion Percent or

Amazingly, according to this article, the price level in November 2009 fell by -0.1% as compared to the previous month.

How could this be? In less than a year a fall of over 65 x 10^107 % in inflation.

I guess that if the rate in Zimbabwe was among the highest ever (but not the highest - who can tell me where/when that was?) then this reduction must certainly be the fastest.

I've got my ideas about it, but give me your suggestions below and we'll discuss them.

No 62: Back to Business

I DON'T really like the first two weeks of January term. It's hard to get back into the routine of school after Christmas and with A2 students doing their exams.

However it's time now to get back on it. That includes this blog too, with more materials posted by me and more comments from readers also please.

Like about this photo.

Now as you might know, I'm very enthusiastic about economics, but I would never EVER make my child and the mother of my child wear such clothing, unlike the Harvard Professor whose blog this comes from.









I do not think Harvard Professors were involved in the creation of this puzzle.

No 61: Summer AS/A2 exam timetable

HERE IS a link to the timetable of exams this summer.

After you have accepted the terms and conditions you'll get to a screen including this:

choose "summer 2010"
choose "GCE"
pick your exam board for the subject you want; for economics it is "aqa"





Then you'll get to a screen where you can choose the subject name you're looking for.

No 60: Don't forget you're at a good school

I KNOW we all have our complaints and dislikes about the places we work, study, live in.

But sometimes it is good to be reminded about the positive qualities of such places.

Here is a league table of Brighton schools and their A-level results, published in the local newspaper using government statistics:

Remember too that we are the only school on the list which is exclusively for overseas students. I think the achievements of the Bellerbys students of the past are even more remarkable since they studied very difficult subjects in a second language, far from home.

I don't also think either myself, the other teachers, or Mr Corcut or Mr Addison, can really take the credit for this - though we all try to help. It largely came from many examples of students working really hard, and proving themselves to be highly capable young adults.

Good luck in continuing this tradition - I am confident you can.

No 59: How to save 5,455.31025 litres of water in one day

MOST OF the water we use each day is not directly consumed by us through drinking or washing. It is used in the production of our food and drink. If we change the food and drink we consume, we can save water. According to the video below, EACH of us could save over 1200 galloons a DAY (that's about 5455 litres). Some examples:

Drinking a cup of coffee - 177 litres of water to produce the coffee
Drinking a cup of tea - 40 litres
Saving = 137 litres of water

Eating a dinner of beef and bread - takes 2323 litres to produce the dinner
Eating a dinner of chicken and baked potato - takes 468 litres
Saving = 1855 litres of water

Also notice the argument in favour of drinking beer!

Recently I have read a number of articles that predict wars - not too far in the future - over access to water supplies. Before it gets to that, which policies could be introduced to encourage water conservation?

No 58: About Snow and Economics

ONE REASON why I think economics is so interesting is that almost anything can be analsyed using economic ideas.

For instance, as we discussed in AS class this morning, the snow.

Some possible economic discussion points about this could be:

1) Externalities: what are the positive and negative externalities created by snow? Students this morning argued that it could depend on which country you were talking about. There are considerable negative externalities (especially lost working hours) in countries like the UK where we are not very well prepared for snow so it disrupts the economy. There may be positive externalities in, for example, countries that have a large winter sports sector.

2) Opportunity cost: every morning we are faced with the decision of whether to get up and go to work/school OR stay in our warm comfortable beds. The snow can change opportunity costs very much in favour of staying at home (unless your job is selling shovels). As students noted, we may expect there to be few students in class, lowering the chance that you will miss any new topics by not coming to class. Therefore, students may not come to class, making sure that this in fact comes true!

Workers may be faced by a choice of going to work and getting paid, of having an excuse of staying at home and still getting paid. I think we all know which choice seems more attractive!

Because of this, some large employers have taken action, such as Sainsburys as described in this article. They have decided to stop pay for workers who cannot come to work due to snow. This was announced 3 days after the news that this Christmas had been their most profitable ever (see here).

No 57: Public Goods Presentation

AS PROMISED, here is the Public Goods presentation in full that I was showing to afternoon AS students yesterday. Sorry that some of the formatting hasn't come out very well.

If there are any other of my presentations you would like me to post, please let me know.

Public Goods Presentation

View more presentations from spottygao.

55. Tutor2u revision note

Look at these links which might be helpful for your revision.

http://www.tutor2u.net/blog/files/Ten_ways_to_improve_your_evaluation_skills_and_marks_for_A2_economics.doc

http://www.tutor2u.net/blog/index.php/economics/comments/a-selection-of-economics-revision-presentations/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+economics_news+%28tutor2u+Economics+Blog%29#When:19:12:00Z

No 54: Very close now....

Happy new term. A shock being back after the holiday.

Visit number 1000 is close - let me know if it's you.

I'm going to be more active again over the next few days in posting. I hope you can be more active too in commenting!

No 53: Severe weather warning for returning students

A SERIOUS message for you guys who are returning to Brighton in the next few days. The UK is experiencing heavy snow and extreme cold - last night the temperature in Manchester was colder than Moscow - and this is predicted to last until the middle of next week.

Please make sure to pack lots of warm clothing before you return and check your flight details carefully. Gatwick airport was closed for a few days and while it is open again now there are a lot of delays and cancellations.

Of course, there is no need to worry as soon as you get back to school, with both the excitement of econmics lessons and the college's excellent heating system to keep you warm ;-)

Here's some photos from my walk up to the back of Hove this afternoon..............

No 52: More about environmental economics

AS I mentioned in an earlier post (No 45), in getting ready for your Module 1 exams you really need to think about market failure and government action regarding the environment.

Here's a selection of recent articles on this topic:

(Click here for full article) 

With this story, you should think about the problems that the French carbon tax has caused, and consider whether you favour a tax or a free market trading scheme in order to try and control carbon emissions.

 

(Here is the full article) 

The 'road train' is an example of what we are all hoping: for scientific research to come up with to solutions to remove environmental problems while allowing us to continue to lead consumerist lifestyles. The unanswered question is whether new technology will appear fast enough to avoid environmental disaster.

As economists we should think about what kind of system is most likely to produce technological advances. Will a free market system of fear of competition and hope for profit stimulate businesses to continually look for innovation? Or would a system where government spends a considerable amount of tax revenue on R + D, and places rules on how much firms have to spend on it, be more successful? Or is it foolish to put so much of our hope into technology rescuing us?

 

The writer of this article in the Telegraph certainly seems to have more belief in free markets leading to environmental solutions than agreements between governments - not surprising given the recent events in Copenhagen!

 

Finally, this press release from the UK government is an example of one of the many government policies based on improving information about environmental issues for households.

This is the economic argument: that many of us continue to act in ways which create costs (both for us and the rest of society) because we do not have full information about the consequences of our actions. In this example, government wants every house to have a meter which shows them exactly how much electricity they are using. The hope is that consumers will reduce their use of electricity, saving themselves money and helping the country cut down on energy use and CO 2 emissions.

Which of these approaches to environmental problems do you think will be the most effective? 

No 51: Global Corruption

This image shows different countries' ratings for level of government corruption. The darker blue and lower the score, the more corrupt a government is said to be. Click here for an interactive version of the map, so you can check out your own country!

Here is a explanation of how the ratings are calculated:

The Corruption Perceptions Index (CPI) measures the perceived level of public-sector corruption in 180 countries and territories around the world. The CPI is a "survey of surveys", based on 13 different expert and business surveys.

Here is a table showing the results in ranking format. 

As was recently mentioned in an article about the future of the world's biggest economies, the level of corruption can be an important factor when new measures to reform the economic system are needed (see Post 48).

No 50: The Chinese Economy overtakes Japan as the World's Second Biggest

THIS article from The Telegraph presents the news that Chinese economy has now become the second largest.