Could raising alcohol taxes save lives?

I’ve just posted a review on the effects of alcohol taxes on alcohol consumption—and on the lives that alcohol abuse can cost. This literature review is unusual in the degree to which it replicates the studies it examines, so I have called it a “replication review.” Data, code, and spreadsheets are here.

The literature on this topic is large, and at first glance it seemed that the high-quality studies contradicted each other. Yet as I dug deeper, I found a pattern: the larger the experiment—the larger the price change—the clearer the effects. In the end, I believe the preponderance of the evidence says that higher prices do correlate with less drinking and lower incidence of problems such as cirrhosis deaths. And I see little reason to doubt the obvious explanation: higher prices cause less drinking. A rough rule of thumb is that each 1% increase in alcohol price reduces drinking by 0.5%. Extrapolating from some of the most powerful studies, I estimate an even larger impact on the death rate from alcohol-caused diseases: 1–3% within months. By extension, a 10% price increase would cut the death rate 9–25%. For the US in 2010, this represents 2,000–6,000 averted deaths/year.

Why I looked into the literature on alcohol taxation

Last November GiveWell convened a daylong meeting in Washington, DC, to gather and test ideas for priorities for our work relating to U.S. policy. (See the page about the event or Holden’s post.) One potential priority that came up—but which otherwise has hardly been mentioned on—was increasing alcohol taxes:

We have no particular reason to believe that the time is particularly ripe for reform in this area, but with alcohol excise taxes gradually diminishing in real terms at both the state and federal levels, it’s possible to envision work at either level.

One example of a prospect to exploit the current political environment is a successful 2011 campaign to raise alcohol taxes in Maryland. The campaign was carried out by a coalition of public health and progressive advocacy groups around the combined goal of reducing excessive alcohol consumption and increasing revenue. Many of the coalition members had previously mobilized together to support the Affordable Care Act.

The next day, Holden asked me to look into what is known about the impacts of alcohol taxes.

Alcohol taxation is not a top priority for Open Phil at the moment. Though we see the issue as uncrowded (which is promising), we see it as having only moderate importance compared to other causes we’re considering, along with highly uncertain political tractability. Nevertheless, our priorities can and do shift, and the issue seemed worth understanding better, particularly in light of the large body of studies on the topic.

My review

An excerpt from the intro:

New deworming reanalyses and Cochrane review

On Wednesday, the International Journal of Epidemiology published two new reanalyses of Miguel and Kremer 2004, the most well-known randomized trial of deworming. Deworming is an intervention conducted by two of our top charities, so we’ve read the reanalyses and the simultaneously updated Cochrane review closely and are responding publicly. We still have a few remaining questions about the reanalyses, and have not had a chance to update much of the content on the rest of our website regarding these issues, but our current view is that these new papers do not change our overall assessment of the evidence on deworming, and we continue to recommend the Schistosomiasis Control Initiative and the Deworm the World Initiative.

Key points:

  • We’re very much in support of replicating and stress-testing important studies like this one. We did our own reanalysis of the study in question in 2012, and the replication released recently is more thorough and identifies errors that we did not.
  • We don’t think the two replications bear on the most important parts of the case we see for deworming. Both focus on Miguel and Kremer 2004, which examines impacts of deworming on school attendance; in our view, the more important case for deworming comes from a later study that found impacts on earnings many years later. The school attendance finding provides a possible mechanism through which deworming might have improved later-in-life earnings; this is important, because (as stated below) the mechanism is a serious question.
  • However, the replications do not directly challenge the existence of an attendance effect either. One primarily challenges the finding of externalities (effects of treatment on untreated students, possibly via reducing e.g. contaminated soil and water) at a particular distance. The other challenges both the statistical significance and the size of the main effect for attendance but we believe is best read as finding significant evidence for a smaller attendance effect. Regardless, the results we see as most important, particularly on income later in life, are not affected.
  • The updated Cochrane review seems broadly consistent with the earlier version, which we wrote about in 2012. We agree with its finding that there is little sign of short-term impacts of deworming on health indicators (e.g., weight and anemia) or test scores, and, as we have previously noted, we believe that this does undermine – but does not eliminate – the plausibility of the effect on earnings.
  • In our view, the best reasons to be skeptical about the evidence for deworming pertain to external validity, particularly related to the occurrence of El Nino during the period of study, which we have written about elsewhere. These issues are not addressed in the recent releases.
  • At the same time, because mass deworming is so cheap, there is a good case for donating to support deworming even when in substantial doubt about the evidence. This has consistently been our position since we first recommend the Schistosomiasis Control Initiative in 2011. Our current cost-effectiveness model (which balances the doubts we have about the evidence with the cost of implementing the program) is here.
  • While we think that replicating and challenging studies is a good thing, it looks in this case like there was an aggressive media push – publication of two papers at once coinciding with an update of the Cochrane review and a Buzzfeed piece, all on the same day – that we think has contributed to people exaggerating the significance of the findings.

Details follow. We also recommend the comments on this issue by Chris Blattman (whose post has an interesting comment thread) and Berk Ozler.


Key questions about philanthropy, part 3: making and evaluating grants

This post is third in a series on fundamental (and under-discussed) questions about philanthropy that we’ve grappled with in starting a grantmaking organization (see previous link for the series intro, and this link for the second installment). This post covers the following questions:

  • When making a grant, should we focus most on evaluating the strategy/intervention, the leadership, or something else? We think both are very important; for a smaller grant we hope to be excited about one or the other, and for a larger grant we hope to thoroughly assess both. A couple of disanalogies between philanthropy and for-profit investing point to a relatively larger role for evaluating strategies/interventions, relative to people. More
  • For a given budget, is it best to make fewer and larger grants or more numerous and smaller grants? We currently lean toward the former. Most of the grants we’ve made so far are either (a) a major grant that we’ve put major time into or (b) a smaller grant that we’ve put less time into, in the hopes of seeding a project that could raise more money down the line. More
  • What sort of paperwork should accompany a grant? Funders often require grantees to complete lengthy writeups about their plans, strengths, weaknesses, and alignment with funder goals. So far, we’ve taken a different approach: we create a writeup ourselves and work informally with the grantee to get the information we need. We do have a standard grant agreement that covers topics such as transparency (setting out our intention to write publicly about the grant) and, when appropriate, research practices (e.g. preregistration and data sharing). More
  • What should the relationship be between different funders? How strongly should we seek collaboration, versus seeking to fund what others won’t? It seems to us that many major funders greatly value collaboration, and often pursue multi-funder partnerships. We don’t fully understand the reasons for this and would like to understand them better. Our instincts tend to run the other way. All else equal, we prefer to fund things that are relatively neglected by other funders. We see a lot of value in informal contact with other funders – in checking in, discussing potential grants, and pitching giving opportunities – but a more formal collaboration with another staffed funder would likely introduce a significant amount of time cost and coordination challenges, and we haven’t yet come across a situation in which that seemed like the best approach. More
  • How should we evaluate the results of our grants? Of all the questions in this series, this is the one we’ve seen the most written about. Our approach is very much case-by-case: for some grants, we find it appropriate to do metrics-driven evaluation with quantifiable targets, while for others we tend to have a long time horizon and high tolerance for uncertainty along the way. More


Change of leadership at Evidence Action

Evidence Action — which runs the Deworm the World Initiative, one of GiveWell’s top charities — announced today that Alix Zwane will be stepping down as Executive Director on August 3. She is leaving to join the Global Innovation Fund as CEO. Laliteswar Kumar, currently Director, Africa Region, will serve as Interim Executive Director. Dr. Zwane expects to remain involved in the organization until August. Evidence Action aims to identify a new Executive Director within a few months.

Dr. Zwane’s departure does not change our recommendation of the Deworm the World Initiative and we would guess that it will not be a significant factor in our view of the Deworm the World Initiative in the future. Our recommendation is largely based on the strength of evidence and cost-effectiveness of its program and its track record of carrying out that program.

If this change has more of an effect on our funding recommendations than we expect, this will likely be due to one or more of the following factors:

  • We have limited experience with changes in senior leadership at our top charities. All of our other current top charities are led by the organizations’ founders. It is possible that the new Executive Director will have a different vision for the organization or may be unable to generate similar results.
  • Strong communication with each of our top charities is a key part of our research process. We have found Dr. Zwane particularly easy to communicate with. Although we have had substantial communication with other staff, much of our communication with the Deworm the World Initiative, particularly around issues related to room for more funding, has been with her. It is possible that communicating with other staff will not be as smooth and could lead to lower confidence in the Deworm the World Initiative’s work.
  • Evidence Action’s new Executive Director may have a different approach to transparency. Evidence Action has been highly transparent to date, a quality which we have found to be relatively rare among charities. Dr. Zwane told us that she does not expect Evidence Action’s approach to transparency to change.
  • We would not be surprised if Evidence Action fails to identify a new Executive Director within a few months. This search, particularly if it takes a while, could distract from oversight of current programs and planning for the future.

Overall, our impression is that Dr. Zwane has been a highly effective leader of Evidence Action and her departure risks disruptions that could lead to us changing our view of the organization, though we would guess that this will not be the case.

In addition to recommending the Deworm the World Initiative, we have also recommended that Good Ventures provide funding for Evidence Action Beta, with the goal of supporting the development of new top charities (e.g., a planning grant and a grant for a seasonal income support project).

Dr. Zwane’s departure may have more of an effect on our work with Evidence Action Beta, where all of our communication to date has been with her, where the track record is more limited, and where our positive view of Dr. Zwane’s leadership plays a larger role in our confidence in the program.

Finally, the Global Innovation Fund is an organization that aims to “invest in social innovations that aim to improve the lives and opportunities of millions of people in the developing world” and has significant resources (at least $200 million over the next five years) at its disposal. We are excited about its future under Dr. Zwane’s leadership.

Geomagnetic storms: Using extreme value theory to gauge the risk

This is the third post in a series about geomagnetic storms as a global catastrophic risk. A paper covering the material in this series was just released.

My last post examined the strength of certain major geomagnetic storms that occurred before the advent of the modern electrical grid, as well as a solar event in 2012 that could have caused a major storm on earth if it had happened a few weeks earlier or later. I concluded that the observed worst cases over the last 150+ years are probably not more than twice as intense as the major storms that have happened since modern grids were built, notably in 1982, 1989, and 2003.

But that analysis was in a sense informal. Using a branch of statistics called Extreme Value Theory (EVT), we can look more systematically at what the historical record tells us about the future. The method is not magic—it cannot reliably divine the scale of a 1000-year storm from 10 years of data—but through the familiar language of probability and confidence intervals it can discipline extrapolations with appropriate doses of uncertainty. This post brings EVT to geomagnetic storms.

For intuition about EVT, consider the storm-time disturbance (Dst) index introduced in the last post, which represents the average depression in the magnetic field at the surface of the earth at low latitudes. You can download the Dst for every hour since 1957: half a million data points and counting. I took this data set, split it randomly into some 5,000 groups of 100 data points, averaged each group, and then graphed the results. Knowing nothing about the distribution of hourly Dst—does it follow a bell curve, or have two humps, or drop sharply below some threshold, or a have long left tail?—I was nevertheless confident that the averages of random groups of 100 values would approximate a bell curve. A cornerstone of statistics, the Central Limit Theorem, says this will happen. Whenever you hear a pollster quote margins of error, she is banking on the Central Limit Theorem.

Key questions about philanthropy, part 2: choosing focus areas and hiring program staff

This post is second in a series on fundamental questions about philanthropy that we’ve grappled with in starting a grantmaking organization (see link for the series intro). In this post, we discuss the following questions:

  • Should a funder set explicit focus areas, and if so, how should they choose the focus areas? We believe it generally makes sense to declare focus areas (i.e., causes that one plans to focus on). While it’s common for philanthropists to choose focus areas based on preexisting personal passions, we are taking a different approach. This choice is arguably the most important a funder makes, and we are trying to be strategic about it. More
  • How many focus areas should one work in? We’re highly undecided about this question. We see most funders working in relatively few focus areas, with a high level of depth and expertise. But we also see some appeal in the idea of pursuing more breadth at the cost of depth. More
  • What does a program staffer do on a day-to-day basis? We use the term “program staff” to refer to the staff who have primary responsibility for finding and evaluating giving opportunities (though not necessarily making the final grant decision). One clear part of their role is checking in on existing grants. But it’s less obvious what the most effective activities are for finding new giving opportunities. Our sense is that the most valuable activities include articulating and refining one’s grantmaking priorities, as well as networking. It strikes us that these activities may often lead to higher returns than running an open-ended grant application process. More
  • What sort of person makes a good program staffer? We are still forming our views on this question. Some qualities we think are generally important include strong alignment and communication with the people who will ultimately be responsible for grantmaking decisions (e.g., any executives and funders working with the program staffers); a strong sense of one’s strengths and weaknesses; and strong interpersonal skills. More