Thursday, May 28, 2020

Death And The Pandemic Economy

The relation between death and the pandemic economy is a fraught one that has become hotly debated, although with not much clear empirical evidence.  I note that recently over on Econbrowser Menzie Chinn has had a series of posts on this matter in various forms.  Obviously a big issue has been the claim by the anti-lockdown crowd that not reopening the economy quickly will lead to an increase in suicides by the increasingly large numbers of unemployed people out there.  There certainly have been many studies in the past showing a variety of bad social outcomes from high unemployment, including suicides, domestic abuse, drug abuse, depression, and more. There does seem to be some strong evidence of several of these notably higher domestic abuse and depression. 

When it comes to suicide and death more broadly, the empirical picture is very murky.  Menzie in one of his recent posts reported on a regression he ran covering monthly data from 1998 to very recently that used dummies for months and then unemployment rates and suicides (in the US) and found the an unexpected "wrong sign" with lower suicides correlated with higher unemployment, although this was not a statistically significant result. He provides no explanation for why this odd result seems to be there, but it does show that this is not a simple matter.

Regarding current data on the main question, so far there does not seem to be any data showing a noticeable rise in suicides in the US since the pandemic, with only reports of some increases among medical personnel, who have suffered from overwork, stress, and even guilt, along with fear.  That we might be seeing that out of them is completely understandable. 

So why might we not be seeing much increase in suicides so far despite all the things going on such as increased depression as well as unemployment and more that would suggest we might expect to see it?  Some have suggested a "wartime" effect: people are suffering, but they know others are as well and so rally around the flag to hang in there. This rally around the flag effect even worked for awhile to boost Trump's polls for a few weeks in late March and early April until people saw how we was botching things, and now his polls are lower than they were before, even as those of some generally unpopular leaders in other hardhit nations like Italy, France, and Spain have seen their poll numbers continue to be noticeably higher than they were previously.

Another element, suggested to me by my medically connected daughters, not all that different from the above, is that people who are depressed feel "validated" because now others appreciate their condition. This is especially relevant for veterans suffering from PTSD and so on. 

Before proceeding further, let me note that there are some factors that may lower the death rate during a recession that can offset to some degree, with the importance of these matters of ongoing debate.  Probably the most important is the reduction of pollution, which is estimated to kill 200,000 to 300,000 people per year in the US.  Obviously pollution reductions now in the US are not going to offset all of that or even most of that, but presumably it does some.  An estimate in more heavily polluted China has claimed that the reduction of pollution there due to the pandemic might have saved up to 50,000 to 100,000 lives.  That is clearly a large number, and way exceeds the number of people in China who died of the coronavirus.

I note on this my earlier post that apparently at the global level carbon emissions have been estimated to have declined by 17% to a bottom point near April 7, with them rising gradually since with a likely gradual recovery of the world economy (with the US lagging on both the virus and the economic recovery). Probably carbon emissions are highly correlated with other forms of pollution, so this looks like a pretty good indicator of timing on that one, at least globally.

Two other items that have been brought up as reducing deaths during a lockdown/recession are auto deaths and work-related deaths.  It is probably true that we have seen some reductions of those in the US in the last few months, but I have yet to see any sort of reliable data on them.  Both of those have been trending downwards in recent years gradually in the US, with auto deaths in 2019 a bit over 36,000 with work-related deaths at about 5,100 (construction is the largest with over 1000).  Suicides last year were at about 48,000 in the US, so larger than those two put together, but as of now we do not know how any of these have changed recently.

I would add that on this matter of auto versus suicide deaths, the US picture is quite different from the global picture, although there is reason to be skeptical about some of the international data on suicides, which get covered up in many natinos (but also in the US to some extent for insurance reasons). Anyway, as of last year global auto deaths were estimated to be about 1.35 million while suicides were at a much lower 800,000.  Almost certainly why we have more suicides than auto deaths in the US unlike the rest of the world is that we have way more guns per capita than any other nation, and it is well established in the US that across states there is a strong correlation between guns per capita and suicide rates.

On a speculative note, given that pretty much the entire US is now engaging in varying degrees of reopening despite very few states having actually met the CDC guidelines for doing so, that we may see a perverse effect of an increase in suicides in the near future, even as the economy expands, which it certainly has been now for some time, maybe even as long as a month.  For one thing, unemployment continues to rise, despite the economy growing (and the stock market rising especially strongly).  But another effect may be the ending of that "wartime" effect.  People who are depressed and unemployed may lose that feeling of solidarity and as they fail to get jobs and may become homeless due to failures to pay rent, and so on, they may become more seriously depressed and feeling isolated.  I can well imagine such an effect leading to more suicides, although I do not know.

I will make a completely anecdotal observation that somehow this week I have observed several people both that I am in close contact with as well as some more distant, who seem to have sort of been freaking out this week.  This is probably just an odd bad luck of the draw, but I am a bit worried that it may reflect my speculation in the previous paragraph, and that whether or not we see more suicides, we may see an increase in the near term of people getting less happy and more depressed.  if that is happening, let us  hope that it ends soon. This pandemic has been bad enough.

Barkley Rosser


Anonymous said...

I have observed several people both that I am in close contact with as well as some more distant, who seem to have sort of been freaking out this week....

[ I am so sorry, and thinking about this. ]

Anonymous said...

An estimate in more heavily polluted China has claimed that the reduction of pollution there due to the pandemic might have saved up to 50,000 to 100,000 lives....

[ Please document this. The estimate strikes me as impossibly high. ]

Peter Dorman said...

A small point and a big one, Barkley. Small: BLS-reported occupational fatalities are traumatic only and exclude nearly all occ disease. The patchy evidence we have supports the rule of thumb that occ disease fatalities are about 10x occ injury fatalities. Of course, disease exposure is latent and cumulative, so it is hopeless to try to estimate the incremental effect of the pandemic.

Big: I know the economy-versus-health frame is implicit in nearly all media and political discussion, but the evidence contradicts it. A large share (for simplicity I would say about half) of the diminished mobility and increased distancing engaged in by the public is spontaneous and largely unaffected by official distancing orders. People will be reluctant to attend gatherings, shop, go out to eat, etc. as long as they worry that the person next to them might be infected. So premature pressure to reopen risks prolonging and intensifying economic damage in the name of short run alleviation. If this view is correct, all the mortality-of-virus vs mortality-of-unemployment stuff is beside the point.

Anonymous said...

March 12, 2018

Four Years After Declaring War on Pollution, China Is Winning
Research gives estimates on the longer lives that are now possible in the country.
By Michael Greenstone

On March 4, 2014, the Chinese premier, Li Keqiang, told almost 3,000 delegates at the National People’s Congress and many more watching live on state television, “We will resolutely declare war against pollution as we declared war against poverty.”

The statement broke from the country’s longstanding policy of putting economic growth over environment, and many wondered whether China would really follow through.

Four years after that declaration, the data is in: China is winning, at record pace. In particular, cities have cut concentrations of fine particulates in the air by 32 percent on average, in just those four years.

The speed of the anti-pollution drive has raised important questions about its human costs. But if China sustains these reductions, recent research by my colleagues and me indicates that residents will see significant improvements to their health, extending their life spans by months or years....





Michael Greenstone runs the Energy Policy Institute at the University of Chicago and is the Milton Friedman professor of economics at the university.

Anonymous said...

Google life expectancies:

Life expectancy in Beijing and Shanghai is now higher than in New York. Life expectancy in these Chinese cities is respectively about the same and higher than in Los Angeles.

Anonymous said...

Peter Dorman:

A large share (for simplicity I would say about half) of the diminished mobility and increased distancing engaged in by the public is spontaneous and largely unaffected by official distancing orders....

[ I would agree. ] said...


I should have written down the source when I saw it. Was from late March, but I just tried to find it again and have failed. As it is, I found it a bit high as well.

It is also ceertainly the case that China has been making a serious effort to combat pollution, with the big shift basically happening in connection with Beijing hosting the Olympic games. They are certainly making more efforts now than are going on at the federal level in the US. But they still have a long way to go.


Good points. Of course usually these disease issues slowly build up. Oddly enough in the current situation we are having this phenomenon of covid-19 breaking out big time in meat processing plants leading to work deaths by disease much more quickly. As it is, where I am in is in a major poultry processing area (Rockingham County around us brags about being "the turkey capital of the world"), so we are a serious hotspot here in Virginia, which is one of the states with the most rapidly rising rates of new cases, although some of that is due to heightened testing.

Anonymous said...

Barkley Rosser, a terrific post and helpful response.


May 28, 2020

On the Economics of Not Dying
What good is increasing G.D.P. if it kills you?
By Paul Krugman

America is now engaged in a vast, dangerous experiment. Although social distancing has limited the spread of the coronavirus, it is far from contained. Yet despite warnings from epidemiologists, much of the country is moving to open up for business as usual.

You might think that such a momentous move would come with elaborate justifications — that politicians pushing an end to social distancing, from Donald Trump on down, would at least try to explain why we should take this risk. But those calling for quickly reopening have been notably silent about the trade-offs involved. Instead, they talk incessantly about the need to “save the economy.”

That is, however, a very bad way to think about economic policy in a pandemic....

Anonymous said...

Paul Krugman @paulkrugman

I've been doing some homework on the economics of social distancing, and its implications for reopening. Not surprisingly, the Trump admin is refusing to do cost-benefit analysis 1/

The government has spent decades studying what a life is worth. It hasn’t made a difference in the covid-19 crisis.
The U.S. government often studies the trade-off between cost and safety. But the White House has failed to release any analysis of the pandemic, which could offer clues to what’s ahead...

7:57 AM · May 28, 2020

But there have been a couple of studies estimating the payoff of social distancing relative to letting the virus rip. They conclude that the cost in GDP so far has been well worth it 2/……

I'll add a back-of-the-envelope answer to a related but somewhat different question: what would the payoff have been to moving more quickly? Columbia researchers estimate that locking down a week earlier would have saved 36,000 lives by May 3 3/…

Meanwhile, we have a pretty good estimate of the effect of lockdown on GDP: around -10% (NOT 40% — that's an annualized growth rate). That's approximately $40 billion per week 4/

Provides a "nowcast" of the official GDP growth estimate prior to its first release.

Now, total deaths that would been avoided is more than the 36,000 avoided by early May; even 40K is lowballing it. But even that means $200 billion if we use a fairly standard estimate, taking the differential effect on older people into account, of $5 million per life 5/

The pressing question, of course, is the cost/benefit of the rush to reopen. I don't have the numbers to do that calculation, but my strong guess is that it looks like a really bad idea. And uncertainty should be grounds for more caution, not less 6/

Of course, we aren't having a rational debate here: if the economy were really the issue, Trump would be doing everything he could to get people wearing masks. But still worth noting that deaths versus the economy is a false choice. For most of us, not dying is worth a lot 7/ said...

I have just seen on Facebook on an report that supposedly homicide rates have risen quite a bit in several US cities during the pandemic, with most of these btween people who know each other, apparently serious disputes. This probably iss going along with the reported increase in domestic violence and abuse cases.

Jim Walker, Realtor said...

Viewing the charts of the concurrent influenza epidemic for the October 2019 to April 2020 season, Flu was on target to kill a record number of Americans. An estimated 62,000 died from the flu. Viewing the infections, hospitalizations, and deaths curves it appears that the curves dropped about 4 weeks earlier than usual to very low numbers in April after social distancing and lockdowns had begun. Because this season flu was one of the worst on record before it was overshadowed by the novel coronavirus, it is feasible that thousands more would have died from the flu, had social distancing not been so widespread. It is also well known that many people with non-covid illness and conditions are avoiding doctors offices and hospitals like the plague - so to speak - This could lead to untreated conditions causing an uptick in serious illness and death. This situation has been far reaching for many reasons, some lives that would have been lost, weren't, or won't be, and some will die from peripheral conditions caused by the lockdown, shortages of hospital beds, domestic violence, drug abuse, etc. It is possible that some will die from food shortages homelessness and other economically influenced outcomes. Observing the protests in Minneapolis, it's possible that political violence will claim lives too, as the year ticks off.

Fred C. Dobbs said...

Forget Swooshes and V’s. The Economy’s Future Is a Question Mark.

NYT - Jeanna Smialek - May 29

WASHINGTON — There is widespread agreement that the United States economy will soon begin to recover from coronavirus lockdowns. The big debate is whether that rebound will resemble a V, a W, an L or a Nike Swoosh.

Increasingly, economists and analysts are penciling in another glyph: a question mark.

Forecasters often label their expectations for a post-recession rebound with letters — a “V” suggests a rapid recovery, a “W” a double-dip, and so on — but that’s hard to do this time around. As all 50 states begin to open up and consumers trickle out of their homes, the path ahead is wildly uncertain, making prognostication dicey.

Second-wave virus outbreaks, changes in consumer behavior or a wave of unexpected business closures could reshape the future. That has left economists unsure how quick or smooth a rebound the U.S. economy will undergo, prompting many to offer a range of scenarios instead of declarative forecasts.

It isn’t just Wall Street forecasters eschewing the alphabet in favor of a range of what-if’s. From the Federal Reserve to the White House, analysts have suggested that posing confident prognostications is probably more misleading than helpful. John C. Williams, president of the Federal Reserve Bank of New York, said during an appearance last week that it is important for policymakers to prepare for every eventuality, rather than focus on one type of recovery.

“We’ve had discussions all my career about V-shaped recoveries, L-shaped, U-shaped,” Mr. Williams said “One thing I’ve learned is, don’t get into that letter game.”

Larry Kudlow, director of the White House National Economic Council, said at an event sponsored by The Washington Post that he shares President Trump’s expectation for a rapid bounceback, but suggested that there are wide ranges around those estimates.

“It’s really hard to model a virus, or a pandemic, the likes of which we haven’t seen in 100 years,” Mr. Kudlow said.

“You can have your own Vs; there’s Vs, there are lesser Vs,” Mr. Kudlow said. “There are combos of Us and Vs.”

Cognizant of that uncertainty, the White House confirmed it will not even issue an update to its economic forecasts this summer, breaking decades of tradition. ...

Fred C. Dobbs said...

Here are the possible shapes that economists are discussing and the caveats that have forecasters writing their predictions in pencil.

The Elusive “V”
Since economists know that economic activity slowed sharply during the first half of 2020, the best possible outcome is a swift recovery, making for a “V” shape in which the economy is back to its 2019 output level within a few quarters.

Unfortunately, economists say that projection is probably a pipe dream. In a note entitled “V Is for Very Unlikely,” Michael Feroli, J.P. Morgan’s chief U.S. economist, described the trajectory as one in which the economy “is turned off and then on, like a light switch.”

Because economic variables like unemployment and output often face a lingering drag after a one-time shock, that sort of outcome is pretty dubious, he said. Lower business capital spending and state and local budget cuts are likely to weigh on growth for some time, alongside other factors, making it hard for the economy to get right back on track. ...

“L” is for Low Expectations
Just as only strident optimists expect a perfect “V,” only outright pessimists are projecting an L, in which growth remains at or near the very-low levels it almost certainly hit during the second quarter. The economy is already showing a partial rebound, suggesting that such a formation is unlikely. ...

“W” Depends on What’s Next
That brings us to a scenario that is still on the table: a W-shaped recovery. It could be that the economy will partly bounce back before plunging again amid a second wave of infections as states reopen and people face renewed exposure to the coronavirus, or if the disease stages a comeback this autumn.

While economists generally say that a “W” remains entirely possible, they aren’t willing to make it their most-likely forecast because it hinges on two total unknowns: whether there is another spike in infections, and whether states will shut down again if that happens. Analysts who venture a guess increasingly favor a nonletter shape as their base-case: the checkmark.

The “Check,” the “Swoosh” and the “Wave” ...

Fred C. Dobbs said...

The “Check,” the “Swoosh” and the “Wave”
The Congressional Budget Office’s baseline expectation suggests that growth will contract slightly in the first quarter and sharply in the second quarter before making a gradual rebound starting in the quarter that stretches from the start of July to the end of September. The budget office doesn’t label the shape, because the climb back will be slower than the drop. The trajectory looks like a checkmark on a graph.

There are big uncertainties around that forecast. Additional waves of infection, variations in consumer behavior, and the timeline for a vaccine are all wild cards that could change the path ahead. A host of risks could lead to worse outcomes while a vaccine breakthrough or unexpected government support for the economy could improve the trajectory.

If a quicker recovery takes hold, the rebound could look more like a “swoosh” as growth improves slowly before accelerating. But if more infections occur and a vaccine remains elusive, the economy could also face a “wave” recovery of repeating peaks and troughs as states continually reopen and then pull back.

So which is most likely? ...

Even the Fed’s economists, never shy to to set out a forecast, have sounded uncertain. Minutes from the central bank’s late-April meeting show that staff offered a baseline forecast in which shutdowns gradually ease and growth resumes into the second half of the year, but warned that “a more pessimistic projection was no less plausible than the baseline forecast.”

Fed policymakers, for their part, “discussed several alternative scenarios with regard to the behavior of economic activity in the medium term that all seemed about equally likely,” according to the minutes. Among them were predictions that the country experienced additional outbreaks and shutdowns (a “W” or a wave), and more optimistic situations in which social distancing measures were successfully relaxed (a check or a swoosh). ...

Fred C. Dobbs said...

On the Economics of Not Dying

NYT - Paul Krugman - May 28

What good is increasing G.D.P. if it kills you?

America is now engaged in a vast, dangerous experiment. Although social distancing has limited the spread of the coronavirus, it is far from contained. Yet despite warnings from epidemiologists, much of the country is moving to open up for business as usual. ...

What, after all, is the economy’s purpose? If your answer is something like, “To generate incomes that let people buy things,” you’re getting it wrong — money isn’t the ultimate goal; it’s just a means to an end, namely, improving the quality of life.

Now, money matters: There is a clear relationship between income and life satisfaction. But it’s not the only thing that matters. In particular, you know what also makes a major contribution to the quality of life? Not dying. ...

Anonymous said...

True test will be when the embargo on evictions and forclosures lapses.

Anonymous said...

Consider a F recovery as we are &#@#%^d!

Fred C. Dobbs said...

(It's Niall; he's done.) via @BostonGlobe

Niall Ferguson - May 29, 2020

As these will be my last words in these
pages, it’s time to look back and take stock.

... I marked my first anniversary of column-writing with a piece that compared Trump with the Chicago Cubs, the outsiders who had just won the baseball World Series. “If there is a differential in turnout between his supporters and hers in the battleground states comparable to the age- and ethnicity-based differentials in the UK referendum,” I wrote, “he can win."
Now, dear reader, you are burning to know what I think will happen this November. Bad luck. You will have to seek my superforecast in Bloomberg Opinion.