Category Archives: tool

How Did COVID-19 Change U.S. Life Expectancy?

The reports of how COVID-19 changed U.S. life expectancy are grim.

The pandemic crushed life expectancy in the United States last year by 1.5 years, the largest drop since World War II, according to new Centers for Disease Control and Prevention data released Wednesday. For Black and Hispanic people, their life expectancy declined by three years.

U.S. life expectancy declined from 78.8 years in 2019 to 77.3 years in 2020. The pandemic was responsible for close to 74 percent of that overall decline, though increased fatal drug overdoses and homicides also contributed.

“I myself had never seen a change this big except in the history books,” Elizabeth Arias, a demographer at the CDC and lead author of the new report, told The Wall Street Journal.

The figures for just COVID-19's impact on U.S. life expectancy are roughly in line with the CDC's preliminary estimates from February 2021, which was based on the then-available data through the first half of 2020.

Unfortunately, the CDC's estimates are rather misleading. Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center, ran some back of the envelope calculations after the CDC released its preliminary estimates and came up with very different results.

The CDC reported that life expectancy in the U.S. declined by one year in 2020. People understood this to mean that Covid-19 had shaved off a year from how long each of us will live on average. That is, after all, how people tend to think of life expectancy. The New York Times characterized the report as “the first full picture of the pandemic’s effect on American expected life spans.”

But wait. Analysts estimate that, on average, a death from Covid-19 robs its victim of around 12 years of life. Approximately 400,000 Americans died Covid-19 in 2020, meaning about 4.8 million years of life collectively vanished. Spread that ghastly number across the U.S. population of 330 million and it comes out to 0.014 years of life lost per person. That’s 5.3 days. There were other excess deaths in 2020, so maybe the answer is seven days lost per person.

No matter how you look at it, the result is a far cry from what the CDC announced.

We built the following tool to do Bach's math, which checks out. You're welcome to update the figures with improved data or to replace them with other countries' data if you want to see the impact elsewhere in the world. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

COVID-19 Factors Affecting National Life Expectancy
Input DataValues
Number of COVID-19 Deaths in a Year
Estimated Average Years of Life Lost per COVID-19 Death
National Population

Change in National Life Expectancy
Calculated ResultsValues
Estimated Years of Life Lost for All COVID Deaths
Years of Life Lost per Person Due to COVID-19
Days of Life Lost per Person Due to COVID-19

So why is the CDC's estimate of the change in life expectancy estimate so different? As Bach explains, it is not because of either the data or the math, but rather, it is because of the CDC's assumptions in doing their math:

It’s not that the agency made a math mistake. I checked the calculations myself, and even went over them with one of the CDC analysts. The error was more problematic in my view: The CDC relied on an assumption it had to know was wrong.

The CDC’s life expectancy calculations are, in fact, life expectancy projections (the technical term for the measure is period life expectancy). The calculation is based on a crucial assumption: that for the year you are studying (2019 compared to 2020 in this case) the risk of death, in every age group, will stay as it was in that year for everyone born during it.

So to project the life expectancy of people born in 2020, the CDC assumed that newborns will face the risk of dying that newborns did in 2020. Then when they turn 1, they face the risk of dying that 1-year-olds did in 2020. Then on to them being 2 years old, and so on.

Locking people into 2020 for their entire life spans, from birth to death, may sound like the plot of a dystopian reboot of “Groundhog Day.” But that’s the calculation. The results: The CDC’s report boils down to a finding that bears no relation to any realistic scenario. Running the 2020 gauntlet for an entire life results in living one year less on average than running that same gauntlet in 2019.

Don’t blame the method. It’s a standard one that over time has been a highly useful way of understanding how our efforts in public health have succeeded or fallen short. Because it is a projection, it can (and should) serve as an early warning of how people in our society will do in the future if we do nothing different from today.

But in this case, the CDC should assume, as do we all, that Covid-19 will cause an increase in mortality for only a brief period relative to the span of a normal lifetime. If you assume the Covid-19 risk of 2020 carries forward unabated, you will overstate the life expectancy declines it causes.

In effect, the CDC's assumption projects the impact of COVID-19 in a world in which none of the Operation Warp Speed vaccines exist seeing as they only began rolling out in large numbers in the latter half of December 2020.

When the CDC repeats its life expectancy exercise next year, its estimates of the change in life expectancy should reflect the first year impact of the new COVID-19 vaccines, which will make for an interesting side by side comparison. Especially when comparisons of pre-vaccine case and death rates with post-vaccine data already look like the New Stateman's chart for the United Kingdom:

How the UK’s vaccine rollout has dramatically reduced Covid-19 deaths - Source: New Statesman (https://www.newstatesman.com/science-tech/2021/07/how-uk-s-covid-19-vaccine-rollout-has-dramatically-reduced-deaths)

HT: Marginal Revolution

Estimated Net Global GDP Lost to Coronavirus Pandemic Exceeds $15.6 Trillion

The triple dip global recession from the coronavirus pandemic continued tracking downward through the end of the second quarter of 2021.

We can see that result in the rate at which carbon dioxide is being added to the Earth's atmosphere. Here, we find the trailing year average of that rate continued to fall through June 2021, as the coronavirus pandemic's negative impact on economic activity continued to take a deep toll.

Trailing Twelve Month Average of Year-Over-Year Change in Parts per Million of Atmospheric Carbon Dioxide, January 1960 - June 2021

Since we're at a quarter end, we'll estimate the net reduction in global GDP that has resulted since December 2019 as a consequence of the pandemic and the actions of governments to cope with it. The net reduction of 0.47 parts per million of atmospheric carbon dioxide has been entered as the default value for this data in the following tool. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Change in Atmospheric Carbon Dioxide
Input DataValues
Change in Carbon Dioxide in Atmosphere [Parts per Million]
World Population [billions]

Change in Amount of Carbon Dioxide Emitted into Atmosphere
Calculated ResultsValues
Carbon Dioxide Emissions [billions of Metric Tonnes]
Estimated Net Change in World GDP [trillions]

Using these default values, we estimate the net loss to global GDP some 18 months after the first stirrings of the coronavirus pandemic began impacting national economies exceeds $15.6 trillion.

From the end of March 2021 through June 2021, the coronavirus pandemic affected the large economies of India, China, and Japan, significant parts of Europe, and several nations in South America. Diminished economic activity correspondes with reduced rates of carbon dioxide being added to the Earth's air.

With other regions in the global economy experiencing strong recoveries, the negative impact being experienced in the regions coping with the pandemic has to be large enough to offset the increasing carbon dioxide emissions coinciding with their increased economic output.

References

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Text File]. Updated 6 July 2021. Accessed 6 July 2021.

Previously on Political Calculations

Here is our series quantifying the negative impact of the coronavirus pandemic on the Earth's economy, presented in reverse chronological order.

The Logistic Map and the Emergence of Complexity

What's the connection between a dripping faucet, the Mandelbrot Set, a population of rabbits, thermal convection in a fluid, and the firing of neurons in your brain?

That's the lead question asked in the following under-19 minute video by Veritasium exploring the logistic map, in which very complex and chaotic outcomes follow from very seemingly simple math relationships.

If you'd like to play around with the logistic map for modeling the population of rabbits over time, using the equation:

Xn+1 = rXn(1 - Xn)

We've built a simple tool to make it easier to cycle through the outputs for whatever parameter values you choose to enter. If you're reading this article on a site that republishes our RSS news feed, please click here to access a working version of this tool our site.

Logistic Map Parameter Values
Input DataValues
Percentage of Maximum Population (Xn)
Growth Rate (r)

For added fun, we'll note that bifurcated behavior has also been observed in stock prices. A 2014 paper by David Nawrocki and Tonis Vaga describes that scenario:

We propose a bifurcation model of market returns to describe transitions between an 'over-reaction' mean regressive state and 'under-reaction' trend persistent states. Since July 1929, the Dow Jones Industrial Average has exhibited non-stationary state transition behavior, including: (1) mean regressive behavior during crisis situations during the Great Depression of the 1930s and again in the crisis of 2008 when the availability of credit was interrupted; (2) strongly bifurcated, or trend persistent behavior from the 1940s through 1975; and (3) more efficient behavior since 1975. The bifurcation dynamic evident in the pre-1975 era is somewhat enhanced by conditional volume and moderate volatility. The bifurcation model is used to develop a quantitative measure of the degree of market efficiency, which indicates that the market has become more efficient, i.e. less trend persistent, since 1975 with the advent of negotiated commissions and computerized trading techniques. Similar findings are presented for the S&P 500 index and the CRSP Value Weighted Index, which represent large capitalization markets.

There's also a 2016 paper by Marzena Kozlowska et al. that points to the "flickering" behavior in stock prices as an early warning signal when the market nears a "bifurcated catastrophic transition", or "tipping point".

We came across both these papers while investigating potential explanations for why long winning streaks and especially why long losing streaks have become less frequent over time. One thing led to another and suddenly we were immersed in the math of rabbit population growth and Mandelbrot sets, which is pretty interesting in and of itself.

Welcome to the world of complexity!...

COVID and the Magnitude of the Border Migration Crisis in Arizona

How many migrants have unlawfully crossed the U.S. border into Arizona during the Biden-Harris border migration crisis?

That's a question we realized we might be able to answer using the state's detailed COVID-19 data after seeing the surge in detentions along the southwestern border since January 2021. The trick to doing that lies in converting the number of excess COVID-19 cases in the state arising from the incoming migrants into a back-of-the-envelope estimate of their total number.

We've previously estimated that from 19 February 2021 through 30 April 2021, Arizona has recorded at least 8,150 excess COVID-19 cases because of the border migration crisis, as shown in the following chart, based on the difference between Arizona's first and second troughs following its recorded peaks in COVID cases:

Comparing Arizona's First and Second Wave COVID Troughs

That number includes the incoming migrants and also Arizona residents who might have been infected with the SARS-CoV-2 coronavirus from their encounters with any infected migrants who entered Arizona during these months, where the real number would be a percentage of that figure. That's something we can reasonably estimate. Once we have that number, we can divide it by the percentage of migrants in the U.S. government's detention facilities with COVID-19, which the Federal Emergency Management Agency indicated was "less than 6% positive" in mid-March 2021. Doing so will give us an estimate of the number of "surplus" migrants who have entered Arizona during the border migration crisis.

The rest is as easy as building a tool to do that math. Which we did, so you can supply the one missing piece of information we don't have: the percentage of Arizona's excess COVID-19 cases represented by the incoming migrants. We've set a conservative estimate default value of 50% in the following tool, which you can change as appropriate. Then click the "Calculate" button to generate your estimate (if you're accessing this article that republishes our RSS news feed, please click here to access a working version on our site).

Arizona's Excess COVID Data
Input DataValues
Excess Number of COVID Cases in Arizona During Border Migration Crisis
Percentage of Excess Cases Represented by Incoming Migrants
Percentage of Migrants Testing Positive for COVID in Detention Centers

Estimated Surplus Migrants Entering Arizona
Calculated ResultsEstimates
Surplus Migrants Entering Arizona During Border Migration Crisis

Using the 50% default value, we estimate some 67,916 surplus migrants entered Arizona since the end of January 2021. That's a little shy of 1% of Arizona's estimated 2020 population of 7.4 million. If the percentage is higher, it's no wonder the Biden-Harris administration is taking steps to contain the negative impacts from its policies.

The following 15-minute video report describes how ICE's mishandling of COVID-19 fueled outbreaks around the country:

Many of the factors described in the video report have played out in Arizona since early February 2021 with the Biden-Harris administration's border migration crisis.

When Should You Take Annual Payments Instead of a Lump Sum?

$100 Banknotes by Pepi Stojanovski via Unsplash - https://unsplash.com/photos/MJSFNZ8BAXw

Imagine this scenario. You are offered the opportunity to take a one-time lump sum payout or an annual payment for the rest of your life. Which option should you choose?

That's a scenario that may play out several times during your life. Sometimes it will be an employer who offers that deal with the company's retirement plan. If you're lucky, it may be a state lottery commission.

If you're like 70% of Americans who were offered that choice for their employer's pension plan in recent years, you will likely choose the lump sum cash offer. But is that the best choice? How can you find out?

If you want to boil it down to a single number without taking other considerations into account, you could base your decision on a figure called the pension income ratio. Simply take the amount of the annual payout you have been offered and divide it by the amount of the lump sum payout you've been offered as an alternative.

Let's do that math with an example in the following tool. If you're reading this article on a site that republishes our RSS news feed, you may need to click through to our site to access a working version of it.

Cash Payout Options
Input DataValues
Lump Sum Payout
Annual Income Payout

Can You Beat This Number?
Calculated ResultsValues
Pension Income Ratio

Now, think about what kind of annual rate of return you could reliably get from investing the lump sum payout. If your result from the tool above is higher than that rate, you might be better off choosing the annual income payout over the lump sum.

Most financial planners will use a rate of return of 6.0% as the rule-of-thumb threshold for choosing which option is better, but a more conservative approach would be to use a lower figure.

For the default numbers in the tool, the result of 6.7% is higher than the 6.0% threshold, which would suggest the better option is to go with the annual income payments. Most financial planners would agree that rate of return would be difficult to average over a long period of time.

But what if the offer for the annual income payments was lower? What if it was $35,000 instead?

That figure would drop the pension income ratio down to 4.7%, where taking the lump sum would become more attractive.

There are other factors that can affect the decision of which choice is better (such as your age, health, etc.) but the idea here is to use the pension income ratio as a starting point for those additional considerations.

For more discussion, check out Michael Aloi's recent article on how a math formula drives one retiree’s choice and Wes Moss' article on the question of whether you should take a lump sum payout or a pension. And of course, our own 2015 article on whether you should take a pension buyout, which was a very topical question that year!

Image credit: Photo by Pepi Stojanovski on Unsplash