Economic Aspects of Obesity

NBER Reporter, Winter 2008 | Go to article overview
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Economic Aspects of Obesity

Genetic factors cannot account for the rapid increase in obesity since 1980--these factors change slowly over long periods of time. Therefore, economists can play a role in examining the determinants and consequences of this trend, although the factors at work are complex, and the policy prescriptions are by no means straightforward. To increase our understanding of this subject, the NBER held a conference on the "Economic" Aspects of Obesity" at Louisiana State University in Baton Rouge on November 10 and 11. The organizers were Michael Grossman, City University of New York Graduate Center and NBER, and Naci H. Mocan, Louisiana State University and NBER.

Several of the conference papers addressed the role of reductions in real food prices in the period at issue, and reported that these declines could account for some of the increase in obesity. These papers bear on the question of whether taxes on food, especially dense and high-caloric fast food, provide an effective public policy tool for addressing obesity. The case for such taxes is weakened if fully informed consumers are taking account of all the costs of their food choices, and strengthened if the obese do nor pay for their higher medical expenditures through differential payments for health care and health insurance, and if body weight decisions are responsive to the incidence of the medical care costs associated with obesity. One paper found that health insurance does indeed "make you fat." But others at the conference argued that a tax on fast food could actually increase caloric intakes via substitution towards non-taxed food. An alternative policy might be financial rewards for weight loss. But another paper found very small average weight loss associated with worksite programs with this feature. Still other papers found evidence that access to parks, gymnasiums, and other recreational facilities increase exercise and reduce obesity. Whether this finding bears directly on the suggestion that such facilities should receive public subsidies depends on the extent to which people with unobserved tastes for physical activities choose to locate in areas with better access to these facilities.

The economic consequences of obesity are complex. One paper found that overweight teens have about the same levels of educational attainment as teens of normal weight. One explanation is that the overweight offset the factors associated with poor health and discrimination by allocating more time to schoolwork and less time to sports and other leisure time activities. Another paper reported that the observed negative relationship between obesity and wages is not caused by obesity per se but rather by a factor such as physical attractiveness or discrimination. One paper contained suggestive evidence that this negative relationship between obesity and wages could be attributable in part to low self-esteem on the part of the obese.

These topics were discussed at the conference:

"Effects of the Minimum Wage on Obesity"

David O. Meltzer, University of Chicago and NBER, and Zhuo (Adam) Chen, Centers for Disease Control and Prevention

Discussant: Kristin Butcher, Wellesley College

"Outcomes in a Program that Offers Financial Rewards for Weight Loss"

John Cawley, Cornell University and NBER, and Joshua A. Price, Cornell University

Discussant: Dhaval Dave, Bentley College and NBER

"Food Prices and Body Weight Among Older Americans"

Dana Goldman and Darius Lakdawalla, RAND and NBER, and Yuhui Zheng, RAND

Discussant: Michael Anderson, University of California at Berkeley

"Economic Contextual Factors and Child Body Mass Index"

Lisa M. Powell, University of Illinois at Chicago, and Frank J. Chaloupka, University of Illinois at Chicago and NBER

Discussant: Tinna Asgeirsdottir, University of Iceland

"The Relationship between Neighborhood Quality and Obesity among Children"

Bisakha Sen, Stephen Mennemeyer, and Lisa C.

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