Obesity

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Buying food more frequently leads to healthier eating habits

August 28, 2008 in Obesity | Permalink

A Health Economics paper by Timothy K. M. Beatty finds that “households who make more frequent, smaller food purchases buy healthier foods than households who make fewer, larger purchases. These households are more likely to purchase foods with a lower share of total calories from fats, saturated fats and a larger share of calories from fruits and vegetables.”

However, I am not exactly sure what this proves. If you want to eat healthy food (fruits and vegetables), you need to shop more frequently since these “healthy” foods tend to spoil more easily than fatty, non-perishable foods (frozen burritos). Further, invidiuduals who live in denser, urban environoments likely 1) live closer to grocery stores and 2) have a social network that values healthy eating. Beatty even admits that “The exact causal relationship between dietary quality and expenditure dispersion is ambiguous.”

It seems more sensible that the desire to eat healthy foods determines shopping habits rather than the converse.

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Why Charles Barkley is healthy

August 26, 2008 in Obesity | Permalink

The New York Times writes that its “Better to Be Fat and Fit Than Skinny and Unfit.”

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Obesity ‘equal to terror threat’

August 15, 2008 in Current Events, Obesity | Permalink

The BBC recently reported that a Durham University professor David Hunter is claiming that obesity is such a problem that its “…threat to our future health is just as significant as the current security threat.” What is Dr. Hunter’s solution?

He said that bigger warning labels, changes in the taxation of “unhealthy” foods, and even the use of compulsory regulations to force manufacturers to cut levels of salt, sugar and fat in their foods could be employed.

I am not sure where you weigh in (pun intended) on this debate, but I think that this is pure hyperbole. Obesity is a health problem, but is one where rational individuals are able to trade-off buying inexpensive, tasty, high calorie meals against the health risks of due to increased obesity. Further, the benefits of eating high calorie, low cost meals are never mentioned. As the cost per calorie decreases, individuals in society are able to afford to purchase more goods (e.g., education, housing).

On the other hand, individuals who experience a terrorist attack are not able to choose their own fate.

If the price of health insurance was risk adjusted so that obese individuals–who are more at risk for diseases such as diabetes–would pay more for health insurance, this would give individuals an incentive to lose weight. In theory this makes sense, but sometimes individuals gain weight when they are sick (since they cannot exercise) and thus risk adjusting health insurance premiums for obesity may be problematic. Nevertheless, claiming that obesity is a bigger problem then terrorism is going too far.

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Junk food tax and Pringles

July 7, 2008 in Obesity, Taxes | 2 comments

Pierre Dubois of VoxEU has a suggestion to reduce obesity rates: a junk food tax. Dubois claims that a junk food tax of 5% would reduce junk food consumption by 15% and thus reduce obesity.

While junk food is not healthy, it offers the most calories per dollar. Thus, a junk food tax would fall disproportionally on the poor. Dubois states that “poor consumers [affected by the junk food tax] could then find cheap calories in less-dense food items, like starchy foods which are less apt to be overeaten.”

From a philosophical point of view, I generally do not like government officials making rules about what type of food you can eat. If you want to have a banana split every day that is your choice.

Some “experts” argue that in countries with public health care systems, however, the public does end up paying for the additional health costs of obesity. Yet it not been conclusively showed that obesity leads to higher health care costs. While obese individuals generally have higher health care costs each year, those who are extremely overweight also have lower life expectancy. According to a PLoS study, obese individuals actually cost the NHS less money due to their lower life expectancy.

Further, as a practical matter, it is difficult to determine which food are junk foods. Most people would claim that Pringles are junk food. In the UK, food is exempt from their 17.5% sales tax with the exception of potato chips. According to the L.A. Times, a British court has ruled that Pringles are not potato chips and thus are exempt from the tax.

If Pringles don’t count as junk food, then what does?

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Playing sports increases your paycheck

July 3, 2008 in Labor Economics, Obesity | Permalink

The WSJ Real Time Economics blog reviews a paper by Michael Lechner which finds that “sports-playing adults saw a boost in income of about 1,200 euros per year over 16 years when compared to their less active peers. That translates into a 5-10% rate of return on sports activities, roughly equal to the benefit of an extra year’s worth of education.” How can playing sports increase income?

The simplest mechanism is that playing sports increases one’s health level. Healthier people are less likely to get sick and more likely to be able to work to earn income. This health difference, however, only explains a portion of the income differential. Dr. Lechner claims that playing sports builds a social network which helps to increase pay (e.g., your friends are the ones who recommend you for jobs). In fact, Lechner finds that sports-playing men display a higher level of “social functioning” than did the less active men.

One worry of this study is that of reverse causation. If someone is very sick, they are not able to play sports. Further, if you are sick, you are probably less likely to engage in social activities. Thus, health–and not sports playing–may be a hidden, unobserved feature which may be driving these results.

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Is Obesity a Problem?

June 14, 2008 in Obesity | 5 comments

There is much evidence that has shown that over time for most developed countries, people have been getting fatter. Obesity rates are especially high in the U.S., but a trend towards increased obesity is similar in most developed countries. Are obesity rates “too high?”

In a recent NBER working paper, Philipson and Posner argue that obesity rates may be too high if one’s goal is to maximize health. However, the authors wisely note that:

“From an economic standpoint, the proper maximand is of course not health but utility, in which good health is only one argument. Rational persons constantly trade off health for competing goods, such as pleasure, income, time, and alternative consumption possibilities. Intervention that considers such tradeoffs unworthy of consideration is paternalistic. This is recognized in such areas as highway safety—no one proposes to shut down highways in order to reduce traffic deaths, or to force automobile manufacturers to equip their cars with engines that limit top speed to 25 miles per hour—but the principle that legitimizes trade-offs involving life and health is equally applicable to obesity.”

One argument in favor of trying to reduce obesity is that obese individuals have higher annual medical expenses. With the public–through Medicare and Medicaid–footing much of this bill, maybe the government should enact policies to reduce these “insurance externalities.” Philipson and Posner respond by stating that these insurance externalities

“…are an argument for experience-rating health insurance, so that groups with above-average expected medical expenses pay higher insurance premiums…There is no reason to single out obesity as a basis for higher insurance costs, since there are other, equally or more, risky “life style” choices that increase expected medical costs.”

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Does living in the suburbs make you fat?

May 23, 2008 in Obesity | Permalink

Living in an urban, pedestrian friendly area may compel individuals to walk more, and thus reduce the likelihood one is obese. Living in a suburban, car-dependent area makes walking less attractive and thus could increase obesity. Some studies have shown that individuals who live in the suburbs weigh more than individuals living in urban areas. Does living in the suburbs cause obesity?

The Vox EU website cites a paper (“Fat City“) that claims that urban sprawl is not to blame for increasing waistlines. The authors examine six years worth of data on 6000 people, 79% of whom changed addresses. They find that people who are more likely to be obese are more likely to move to sprawling neighbourhoods. However, those who moved from urban to suburban areas showed no additional weight change compared to individuals who moved from suburban to urban areas. It looks like a case of correlation not being the same as causation.

To find out how “walkable” your neighborhood is, check out Walk Score.

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Ending obesity will save $487 billion…really?

May 1, 2008 in Obesity | Permalink

Increasing obesity rates have significant costs to society. An article in MSN Money (“What if no one were fat?“) claims that if, on average, each American was to lose 20 pounds, we would save $487 billion. Where is this number coming from?

  • Savings on fuel for cars and airlines due to their lighter loads would top $5 billion.
  • Plus-sized clothing costs 10% to 15% more, so shoppers would save $10 billion on shirts, pants and dresses.
  • Reduced food consumption would translate into a savings of $81 billion.
  • The medical costs of obesity-related problems such as diabetes, stroke and heart disease run near $140 billion.
  • Productivity in the workplace would jump from fewer sick days and better health: This would lead to a savings of $257 billion.
  • The weight loss industry might become obsolete, resulting in a savings of $55 billion.

Are these figures credible? The savings on flights and car trips likely are true. Reduced material cost from plus-sized clothing may save costs, but any way to standardize the body shape would save costs. There would be significant cost savings as well if individuals were the same height. Cynthia Istook, an associate professor in textile apparel at North Carolina State University, says clothing makers could then afford to offer more variety in hip and bust sizes, rather than asking every woman to squeeze into an hourglass shape. Thus, costs likely would not decrease, but customization would increase.

Would reduced food consumption reduce obesity? The problem is not that food is too expensive; it is that it is too cheap. Eating a high calorie diet for a low cost is easy (just grab some fast food or buy processed food at the grocery store). Buying fresh fruit and vegetables is more expensive (in terms of calories per dollar) than eating processed food. Thus, moving people to a healthier diet will likely decrease obesity, but increase food costs.

Lower obesity rates likely would decrease disease rates. But just because there is a correlation between obesity and disease rates, doesn’t mean that obesity is the causal factor. It could be that individuals who are obese are also more disease-prone and this would be the case even if they lose weight. Still, on an annual basis, healthier living of course does decrease medical costs. Over a lifetime, however, healthier lifestyles and reduced obesity may actually increase medical costs (see 12 Feb 2008 post).

Sick days may decrease when obesity rates drop, but individuals may have less time to work if they go to the gym everyday. Also, it is highly unlikely the weight loss industry would disappear. Individuals are always unsatisfied with their bodies. Money saved on weight loss programs might now go towards plastic surgery or gym memberships.

Further, these figures do not take into account the utility loss people will incur not eating the foods they choose.

What would we do with all the money we saved from reduced obesity? Maybe we could celebrate with some bananas foster or Extraordinary Desserts.

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Incidence of Healthcare Costs of Obesity

April 3, 2008 in Health Insurance, Labor Economics, Obesity | Permalink

Gruber (1994) shows that the costs of employer-provided health insurance benefits are passed on to employees through lower wages. But do employees with higher expected medical expenses have their wages reduced by a higher amount to reflect the additional medical costs to employers? This may not be the case if employers can not observe the health of employees when they hire them. On the other hand, for obese individuals, the fact that they are obese is easily observable. Papers such as Finkelstein, Fiebelkorn and Wang (2003) show that annual medical expenditures for obese individuals are $732 more than those of normal weight. Is this additional cost passed on to obese employees through lower wages?

This is what an NBER working paper by Bhattacharya and Bundorf (2005) aims to investigate. The authors compare the wages of obese and non-obese individuals in companies without health insurance. Then they compare the differences in wages of obese and non-obese employees in companies with health insurance. Since no health insurance costs will be passed on employees if no insurance is offered, the difference between the two wage gaps may be able to identify if higher health insurance premiums are passed on to employees through lower wages. If there are differences in wages between obese and non-obese workers (i.e.: due to discrimination, lower productivity, etc.) these differences are likely constant across firms with and without health insurance.

The authors find that “the incidence of obesity on wages for workers insured through their employers is -$1.68.” After controlling for a variety of covariates, this estimate lowers to -$1.44. This difference is mostly due to the fact that wages of obese workers with health insurance grew slower than thinner workers with health insurance. This may be due to the increasing price of medical care, the increasing severity of obesity–the BMI of individuals at the 95th body weight percentile has increased over time–or the aging of the population in the panel.

As a falsification test, the authors use a similar difference-in-difference estimation strategy comparing the obese vs. non-obese wage gap between employers with and without other fringe benefits (e.g.: life insurance, dental insurance, retirement benefits, child care, maternity leave, etc.). If obesity does not affect the cost of these fringe benefits, than we should see no difference in the obese/non-obese wage gap between employers who do and do not offer these benefits. The authors find that this difference-in-difference estimator is not statistically different from zero.

There are a few problems with this analysis. First the authors admit that “those with relatively low productivity due to health consequences of obesity may consume more medical care and, as a result, self select into firms offering health insurance.” Also, the data the authors have only reveals whether or not the individual has health insurance, and does not give the insurance premium paid by either the employer or the employee. Thus, these estimates are likely to be very imprecise.

Nevertheless, if this study’s results are true, then it would imply the following:

“If there are no externalities in these decisions, then “twinkie” taxes will only distort already optimal decisions. But if employer-provided insurance pools the health risk of the obese and non-obese, it will create an externality that reduces incentives to maintain a normal weight. Our evidence on the incidence of the obesity wage premium suggests that pooling of the obese and non-obese does not occur in the employer-sponsored insurance market; hence the externalities caused by health insurance on decisions about body weight are small.

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John DiNardo hates Freakonomics

March 26, 2008 in Economics - General, Obesity | Permalink

Freakonomics by Steven Levitt and Stephen J. Dubner is an extremely popular book that has made economics a (somewhat) sexy topic of discussion. Levitt’s research makes economics exciting and his quirky, controversial studies make interesting reading.

John DiNardo, however, thinks that even Freakonomics is “interesting” and “entertaining,” it may not be revealing truths. Dr. DiNardo has written three critical reviews of the book. DiNardo’s criticisms call into doubt the meaning of some of the conclusions derived from Levitt’s research. For instance, DiNardo discusses the logical meaning the causal effect of obesity on health.

Nonetheless, I would argue that it is unlikely that anyone will devise a severe test of the proposition that obesity causes an increase in all-cause mortality. Simply put, the effect of obesity (or of ideal weight) is inextricably implementation specific. That is, it is not helpful to think about the “effect” of obesity for the same reason it is not helpful to debate the “causal effect of race on income”(Granger 1986). Many of us suspect, for example, that encouraging obese individuals to “starve themselves” for short periods of time might help one lose weight, but wouldn’t necessarily promote longevity (although it might, who knows? ).

Similarly, we might expect weight loss that results from increased physical activity to be more protective than
weight loss that results from increased life stress. The experience in the U.S. with the drugs fenfluramine and dexfenfluramine (Redux) is a case in point. Despite good evidence that the causal effect of taking Redux was weight loss, the drugs were pulled from the market because a “side effect” of the medication was an increase in potentially serious heart problems (Food and [Drug] Administration 1997) . Indeed, it would appear that the presumption that obesity is a cause of ill health made it virtually impossible to debate whether non–obesity was the cause of the increased heart problems. Rather, the consensus seems to be that the heart problems were not caused by non–obesity, but rather by Redux’s “side effects.”

My point is simple: when each way of “assigning” obesity that we can imagine would be expected to produce a different effect on all–cause mortality or other outcome, it is not at all clear that it is helpful to debate the “effect of obesity.” It seems more intelligible (and more policy relevant) to discuss the effect of Redux or exercise than it is to talk about the “effect” of obesity.

One study that DiNardo does hold up as an example of fine research is Cullen, Jacob and Levitt (Econometrica 2006). This paper was written by Levitt as well as my dissertation advisor Julie Cullen.

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