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Thursday, April 14, 2016

Annals of derp: Is income inequality a deadly weapon?

Drawing by Homer Davenport (h/t Arundel, see Comments).

It's our old friend James Pethokoukis for the American Enterprise Institute, here to pass on the great news: Income inequality doesn't kill people!

That is, in the recent Health Inequality Project study it looked pretty scary:
the Health Inequality Project — a team led by well-known economists Raj Chetty and David Culter — did find big differences between rich and poor. The richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women. The richest Americans have gained approximately three years in longevity since 2000, while the poorest Americans have experienced no gains. So income inequality is a killer, right? Case closed!
(It's so cute the way he lets us know that they aren't merely economists but "well-known economists", just so you know this is really serious. Though it would have been better if he'd managed to spell Cutler's name right.)

But wait! Pethokoukis has worked out an argument that inequality isn't to blame. These poor people are dying of living in the wrong place. See, there's another factor, geography: being poor is less deadly in some towns than others:
Not so fast. Turns out the researchers failed to find a strong correlation between income inequality and life expectancy. Indeed, poor Americans who live in some of the country’s most unequal places, such as New York and San Francisco, have some of the best outcomes.
Or, as we see in a chart from the Chetty-Cutler project which Pethokoukis does not, for some reason, reproduce in his article,
While your wealthiest dudes will tend to live to be 87 no matter where they live, the poorest of the poor get different results, in New York likely to stretch out their miserable existences to 81 or so while the Detroit pauper is gone on average before 76. And yet New York (GINI 0.5050) and San Francisco (0.4845) have more economic inequality than Dallas ( 0.4625) and Detroit (0.4680) do! (Actually they're all pretty high, even by US standards)! So inequality plainly has nothing to do with the case, right?

Uh, no. Not right. Wrong, in fact, putting it somewhat bluntly.

1. There is a long and well-known literature establishing that there is a relationship between economic inequality and inequality of life expectancy, international and pervasive (JSTOR link). Whatever the Chetty-Cutler study may have found in its particular local research doesn't disconfirm that huge body of evidence; at most it can demonstrate a bunch of exceptions.

2. The Chetty-Cutler study does not in any way contradict it anyway. In all the US jurisdictions they looked at that relationship also exists. It's just narrower in some places than other. Narrow how?

Well, life expectancy among the poor is highest in California, New York, and Vermont; lowest in Nevada, followed by Michigan, Ohio, Indiana, Kentucky, Tennessee, Arkansas, Oklahoma, and Kansas. (Pethokoukis doesn't reproduce that list, either.) A commonplace liberal blogger looking at that might suspect that, son of a gun, life expectancy for the poor is higher in Blue states than Red (Detroit mostly under the direct rule of penny-pinching Republicans in Lansing), but for goodness sake how could that be?

3. Hey, maybe James Pethokoukis knows something about that:
Lower-income Americans appear to fare better in cities with lots of high-income college grads, more immigrants, and high levels of government spending. 
You don't say!

4. Make that government spending and nanny-state policies like smoking bans. Thanks for pointing that out, Jim. Government by Democrats doesn't eliminate the inequality-driven discrepancy in life expectation, but it mitigates it. In perfectly obvious ways. Liberal policy saves lives. Good! But income and wealth inequality does kill people, and sharply reducing it would help even more.

Pethokoukis, could easily understand this, by the way, he's not stupid, but he doesn't want to, because that doesn't pay as well. Kind of a definition of "hack".

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