Does the lack of economic freedom kill you?

A regression of life expectancy on Gini was, as we established, not statistically significant for the 28 advanced OECD countries, or the 21 (or sometimes 23) that The Spirit Level uses.

But why get bugled up in country selection? Let us include all countries the U.N gives data for! The only problem is that some countries have short life expectancy because they are poor. In order to correct for this, I control for income, which the UN conveniently provides.

In a regression of all 140 countries with data the coefficient for Gini is not statistically significant (p 0.169). GDP is statistically significant, (p-value 0.000).

I also did the same regression, now looking at the association between life expectancy, per capita income, and the Heritage Index of economic freedom.

In a regression of the 169 countries for which there is data, both per capita income AND The Index of economic freedom are statistically significant (p value for both 0.000).

There are more countries with missing data for Gini than the index of economic freedom. If we only look at the 140 countries where we have data for Gini the exact same results hold (pvalue for the Index of Economic freedom now 0.002).

So unlike Gini, the Index of Economic freedom has a statistically significant association with life expectancy, controlling for per capita income, in the full UN sample.

Can we now claim that we have proven that free-market policies increase life expectancy? Or that the lack of economic freedom murder people?

OF COURSE NOT. We only have a correlation, not a causation. There are a million reasons why these two variables could be related. Maybe more democratic countries have better health policies, and also more free-market policies. Maybe more ethnically homogenous countries have less health problems and more free institutions. Maybe there is reverse causality, with more healthy people having better institution.

If you go around with weak evidence, not having established causality, and screaming that you have proven that the lack of Economic freedom kills people, you are an ideologue, and not a scientist.

This example illustrates the two problems of the Spirit Level. First, their basic correlations are much weaker than they give the impression of, and often not even statistically significant. Second, they have not a shred of evidence in terms of inequality actually causing bad outcomes.