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Ask What Changed

Summary:
When you try to understand change, whether in economics or in the rest of life, one good rule is to ask what other factor or factors changed. To explain a change in one variable, we have to point to another variable that changed, not to one that stayed the same. Asking what changed can lead us to reject some explanations and embrace others. Consider three examples: the recent California fires; cable television’s sudden decision to drop C-SPAN in the early 1990s; and the dramatic increase in heroin-related deaths. These are the opening two paragraphs of Charles L. Hooper and David R. Henderson, “Economists Know: Ask What Changed,” the Econlib Feature Article for February. Another excerpt: The aforementioned Hill and Kakenmaster do point to one factor that has

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Ask What Changed

When you try to understand change, whether in economics or in the rest of life, one good rule is to ask what other factor or factors changed. To explain a change in one variable, we have to point to another variable that changed, not to one that stayed the same.

Asking what changed can lead us to reject some explanations and embrace others. Consider three examples: the recent California fires; cable television’s sudden decision to drop C-SPAN in the early 1990s; and the dramatic increase in heroin-related deaths.

These are the opening two paragraphs of Charles L. Hooper and David R. Henderson, “Economists Know: Ask What Changed,” the Econlib Feature Article for February.

Another excerpt:

The aforementioned Hill and Kakenmaster do point to one factor that has changed: the wildland-urban interface. Unfortunately, their data cover changes only up to the year 2000, but the period of bad fires started a decade after that. So has anything else changed dramatically lately?

Actually, yes. What has changed is precipitation. California’s three-year precipitation in 2011-2014 was the second lowest since state records were first collected in 1895, and normal precipitation levels haven’t yet returned. Trees are still suffering from the shortfall. The biggest change over the last decade isn’t temperatures or forest management—it’s a drought of historic proportions.

Read the whole thing.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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