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The relationship between income and life expectancy has a limit. Several studies indicate that good financial conditions determine access to good quality healthcare, housing and education, among other items that lead to a drop in mortality. Historically, this has been the metric used to justify longevity increases over the centuries.

Today, we observe that, after reaching a certain income level, income gains in families do not impact longevity all that much. The major revolution occurs at the base of the pyramid, when states are able to reduce the poverty line.

See the Preston curve in Figure 1. It shows that, on average, people born in rich nations live longer than in poor nations. However, the direct evolution relationship between GDP and life expectancy has a limit. There are examples where income did not translate in an increase of longevity. This is well illustrated in the example of developed nations in Figure 2.

Figure 1: Preston curve in 2012

Source: Euromonitor International
Note: GDP is measured at purchasing power parity and reflects differences in price level between countries

Figure 2: Life expectancy in developed countries, 2012

Source: Euromonitor International

Criteria for being considered a developed country. There’s one important detail not apparent in the two charts above – the definition of a developed country. To be part of the group of developed countries, in addition to income, it is necessary to have export diversification, as well as a degree of integration into the global financial system, according to the International Monetary Fund.

For example, economies rich in mineral resources, with a high per capita GDP, exceed the standard limit of US$20,000 but do not make the list of “developed countries”. This is because they do not fulfill the export diversification criterion. Therefore, not all industrial nations appear in the Preston curve graph.

Direct comparison of money and longevity. Let’s consider only specific income bands and life expectancy. Using the Euromonitor database (Passport), we took data for 47 countries where per capita GDP and PPP terms exceeds US$ 20,000, US$ 30,000 and US$ 40,000. We compared the data with local life expectancy. Nations with income above US$ 20,000 have a much steeper curve than the list of developed countries. However, when per capita GDP exceeds US$ 30,000, the gain in longevity is insignificant.

DID YOU KNOW THAT…

…Hong Kong is #1 in longevity?

In 2012, one of the main financial centers of the world, Hong Kong, had the highest life expectancy in the world. A child born in Hong Kong could live on average 83.6 years. In second place came Italy, followed by Switzerland, Japan and France, which are countries with very significant income variation. Among developed countries, United States does not follow the standard behavior of income and life expectancy – having a high per capita GDP and low longevity. The three nations of Eastern Europe – Czech Republic, Slovakia and Estonia –, which recently adhered to the developed countries group, present lower income and life expectancies.

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