Great post on how there's more than meets the eye on this chart.
I for one would be very interested in a Youtube tutorial! Most familiar with Python myself, but a walkthrough of what you did in R would also be interesting.
I use Mark's chart to suggest lack of innovation. (In a Paul Romer kind of way) That could come from regulatory barriers, investment or ideas. What data set reveals which? Can we map that covariance?
1) Why is "Food away from home" a service but "Alcoholic beverages away from home" a good?
2) "Educational books and supplies" - to the extent that this is driven by college/university assigned text books, (a) there is little check on the demand side since professors drawing up their syllabi have no reason other than concern with student welfare to be concerned with cost & (b) this is a case of monopolistic competition on the supply side for many courses, with a handful of alternatives for many "101" & "201" courses.
3) "Prescription Drugs" - similar to "Education books and supplies". Insurance covers much of the cost of many prescriptions, pharma is highly concentrated & the prices often are the result of lobbying and gaming the patent system.
All of which is to say that regulation of the kind that concerns Andreesen is very much a red herring and the issues are services (Baumol disease?) and market structure: reinforcing the conclusion of the OP
In the 1970's, the treatment of heart attack involved open heart surgery, followed by 3-6 weeks in the hospital (half in the ICU) and had 50% mortality at 5 years.
Today, the treatment of that same heart attack involves angioplasty, typically followed by 0-2 days in hospital.
It amuses me that despite decades of medical technological breakthroughs which have caused cost-savings like this all across the most expensive part of medical care - surgical specialties like neurosurgery - no one in the broad environment of economics thinkers seems to take note.
Instead, the conventional wisdom is to keep investing in "lower barrier of entry" services like GP visits and preventative care, which are the most service-oriented of the heath care stack. You're not healing a fracture faster now than 1970, nor will eating the perfect diet eliminate your risk of cancer. But these are the things we think will save us money.
All the while the "expensive stuff" are seen as a luxury that we should maybe provide less of.
I have a hard time seeing delivery services as more expensive when I literally receive Amazon boxes daily at my home for free.
Even UPS/FEDEX when I’ve had to use it didn’t seem so bad.
Great post on how there's more than meets the eye on this chart.
I for one would be very interested in a Youtube tutorial! Most familiar with Python myself, but a walkthrough of what you did in R would also be interesting.
I use Mark's chart to suggest lack of innovation. (In a Paul Romer kind of way) That could come from regulatory barriers, investment or ideas. What data set reveals which? Can we map that covariance?
1) Why is "Food away from home" a service but "Alcoholic beverages away from home" a good?
2) "Educational books and supplies" - to the extent that this is driven by college/university assigned text books, (a) there is little check on the demand side since professors drawing up their syllabi have no reason other than concern with student welfare to be concerned with cost & (b) this is a case of monopolistic competition on the supply side for many courses, with a handful of alternatives for many "101" & "201" courses.
3) "Prescription Drugs" - similar to "Education books and supplies". Insurance covers much of the cost of many prescriptions, pharma is highly concentrated & the prices often are the result of lobbying and gaming the patent system.
All of which is to say that regulation of the kind that concerns Andreesen is very much a red herring and the issues are services (Baumol disease?) and market structure: reinforcing the conclusion of the OP
In the 1970's, the treatment of heart attack involved open heart surgery, followed by 3-6 weeks in the hospital (half in the ICU) and had 50% mortality at 5 years.
Today, the treatment of that same heart attack involves angioplasty, typically followed by 0-2 days in hospital.
It amuses me that despite decades of medical technological breakthroughs which have caused cost-savings like this all across the most expensive part of medical care - surgical specialties like neurosurgery - no one in the broad environment of economics thinkers seems to take note.
Instead, the conventional wisdom is to keep investing in "lower barrier of entry" services like GP visits and preventative care, which are the most service-oriented of the heath care stack. You're not healing a fracture faster now than 1970, nor will eating the perfect diet eliminate your risk of cancer. But these are the things we think will save us money.
All the while the "expensive stuff" are seen as a luxury that we should maybe provide less of.