By Conor Clarke
This chart by Cato's AEI's Andrew Biggs has been snaking its way around the blogosphere for the past week:
And it's gotten approving [update: and skeptical!] chirps from Megan McArdle, Tyler Cowen, Jim Manzi, Arnold Kling and Greg Mankiw and others, a good deal of whom parrot the old line about how this shows that "The reason that we spend more [on healthcare] than our grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes." If it were waste, fraud and abuse, wouldn't you see the difference in the animal market?
But let's not flap about this too much. The chart is hounded by some fatal problems. John Schwenkler gently badgered me into trying to make a new version of this chart that deals with some of them, and I've been monkeying around with the data for the past couple of days. But, for reasons I'll grouse about after the jump, I can't reproduce a better version of this chart. (Scott Winship and Zubin Jelveh have ferreted out some of the missing data.) What I can do is graph the growth of pet food spending over the same period, and then list some of the reasons why the original chart doesn't prove much at all. (And cut out the dumb animal puns.)
1. This data is drawn from the same source (the Consumer Expenditure Survey) as the original chart. The raw slope of the pet food spending line is actually higher than the raw slope of the veterinary spending line. The normalized slope of the veterinary care line is a bit higher, but both are higher than average economic growth over the same period. Does this mean there is something unique about the two health markets, or something unique about the two animal markets? Or neither? I have no idea.