So why am I so angry about Elizabeth Warren's study? Aren't I just miffed because, as one commenter put it, she has "failed to present her results in the way most congenial to libertarian ideology?"
Er, no. The world is full of studies that do this. I get mad at only a minority of their authors. I am mad, first of all, because Elizabeth Warren is not a third-year statistically illiterate policy analyst at a health care advocacy group. She's a professor at Harvard, and the head of the Congressional TARP oversight panel. This conveys a certain responsibility to present data in the most illuminating way, not in the way that will induce journalists to say things that aren't true.
And they have done just that. Read a sampling of the stories about this study on Google News. It's clear that none of the authors of the stories I've read understand that we're talking about a smaller absolute number of medical bankruptcies, representing a larger proportion of a much smaller overall number: that this increase in the proportion could at least as easily have been driven by less need for non-medical bankruptcy, than by bigger, scarier medical bills. Indeed, many of the stories indicate that medical bankruptcies have risen since 2001, which is not true even according to Warren's figures.
I submit that the study is designed to get that result from journalists. Readers have responded that my criticism is out of line, because after all, they only talk about the proportion, so who am I to say they're misleading the readers?
Yes, but why do they only talk about the proportion? In general, economics papers talk about absolute numbers whenever they can, and use proportions only when things like changes in income and inflation make comparisons between years too difficult. I submit that we want to know, not whether medical bankruptcies are a bigger or smaller proportion of overall bankruptcies, but whether more people are being pushed into bankruptcy by their medical bills. To take the extreme absurd case, if only one person had declared bankruptcy in 2007, but that one person had had huge medical bills, would this be a sign that we need national health care?