Wednesday, June 02, 2010

Life Expectancy in the U.S. vs. Real GDP per Capita

Does it seem like there might possibly be a statistically significant relationship between: a) life expectancy in the U.S. and b) annual real GDP per capita between 1929 and 2007?

12 Comments:

At 6/02/2010 6:30 PM, Blogger Paul said...

If you look at the work of Hans Rosling, http://www.ted.com/talks/lang/eng/hans_rosling_asia_s_rise_how_and_when.html you see his work in statistical analysis makes the same point for China and India. There does seem to be a link.

 
At 6/02/2010 9:20 PM, Anonymous Lyle said...

This starts with the increased expenditure on sanitation and medicine over this period, including essentially universal indoor plumbing, and clean water. One could run the graph back to 1870 (to avoid effects of the US civil war) and get the same trends. It also has worked world wide thru the introduction of antibotics as well as vaccines against various aliments. As you have more money to spend you can spend more on medicine and sanitation.

 
At 6/03/2010 12:24 AM, Blogger Charles Platt said...

We're in trouble if this alleged relationship continues to hold, because there has been no progress at all in increasing *maximum* lifespan. Therefore the *average* life expectancy must eventually level off, approaching maximum lifespan asymptotically. I certainly hope real GDP per capita does not behave the same way.

Of course there is a chance that maximum life expectancy may be increased eventually, but not real soon.

 
At 6/03/2010 2:58 AM, Blogger Tim Worstall said...

Yes, of course: but what's interesting is the causation, not just the correlation.

A bit of a flier, but a goodly part of per capita increase in GDP is TFP...which in turn is driven by technological advance.

And a goodly part of increasing life spans is driven by technological advance.

As I say, this is a bit of a flier, not a claim to have discovered the truth. But it is at least possible that what we're seeing is not a direct relationship between lifespan and wealth, but that both are raised by technological advance.

 
At 6/03/2010 4:58 AM, Blogger Jet Beagle said...

This comment has been removed by the author.

 
At 6/03/2010 5:01 AM, Blogger Jet Beagle said...

Tim,

I agree that some of the improvement in life expectancy is directly caused by technological advances. But that seems too simple an answer to me. Technological advancement raised the productivity of labor which produced food, clothing, and shelter. This freed up labor to be employed in tasks which directly raised life expectancy - particularly in the medical field. As I see it:

TFP => +GDP/capita => +life expectancy

 
At 6/03/2010 10:16 AM, Anonymous Anonymous said...

I suspect a spurious correlation in the Granger-Newbold sense. But it's interesting, for sure.

 
At 6/03/2010 11:12 AM, Anonymous morganovich said...

i doubt it's spurious.

access to good food and shelter is important to health. so is access to health care.

health care spending grows more rapidly than income once you reach a certain point of wealth. rich people have more to spend on health, so they do.

that would imply that there's nothing spurious about this correlation.

i would bet you that life expectancy in nations that suffer prolonged declines in GDP decline.

look at africa.

 
At 6/03/2010 11:14 AM, Blogger bix1951 said...

white female life expectancy only went from 78.1 to 80 years from 1980 to 2000, a 2.5 % increase

black male, same period went from 63.8 to 68.2 a 7% increase

 
At 6/03/2010 11:21 AM, Blogger bix1951 said...

and how much did per capita income go up from 1980 to 2000?

45%

 
At 6/03/2010 12:22 PM, Anonymous doubleBubble doubleDip said...

"
statistically significant relationship between: a) life expectancy in the U.S. and b) annual real GDP per capita
"

Does this mean that each of us should insure longer life by working more at accumulation of net worth? Does it mean that money provides protection against premature death? Or does it simply point out that longer life span is essential to the enhancement of the interest compounding effect on accumulation of wealth?

Conversely, does it point to the fact that generating smaller families makes couples both wealthier and healthier?

Does a country's perceived wealth attract foreign surgeons who are addicted to both unnecessary surgery and secondary fees for the re-operation of botched procedures? Do these extraneous surgeries provide the money for a kickback to the immigration officials who legalize the entire scam?

U B Judge
!

 
At 6/07/2010 6:39 AM, Blogger Dr Nikan Firoozye said...

I'm sorry, I do think that it is worthwhile to note relationships between income/gdp per capita and life expectancy, but from an empirical p.o.v., this is really a terribly bad way to present this sort of relationship.

Just to point out the fallacy of this (graphical) observation, should we not expect to raise our incomes significantly unless we live past 100 years? Or will our gdp be stalled? What if you took a developing economy (which yes, does have lower gdp per capita and lower life expectancy), can you merely extrapolate? I doubt it.

Any relationship between two clearly trending variables needs further work. It's too easy to use this sort of result to come to misleading results. (I know, I work in a sell-side bank! I've seen plenty of bad research in my time). You should be looking at cointegration first and foremost.

That being said, I do agree with the spirit of the argument.

 

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