Three Essays on the Economics of Obesity

Date of Completion

January 2012


Economics, General|Health Sciences, Public Health




In the U.S. obesity has more than doubled since 1976-78 after increasing a mere 1% in the previous two decades (see figure i.1 below). Today, more than 66% of Americans are obese or overweight. Obesity is linked to a number of chronic health conditions such as heart disease, diabetes, high cholesterol, and even cancer. Health costs related to obesity are estimated to be 9.1% (CDC, 2006c) of direct medical expenses respectively. Estimates suggest that 365,000 Americans die annually from poor diet and lack of physical activity (Mokdad, et al., 2004, 2005). ^ From a medical perspective, obesity is an aberration from biological norms. The body's systems are designed, by and large, to return the body to equilibrium and health. The persistence and prevalence of obesity suggests that there maybe something more at work than biological processes. ^ Taking an economic perspective, this dissertation inherently starts with the premise that consumers are rational and attempts to explain persistent obesity from that perspective. That means that their choices make sense given their internal preferences and the environment in which they make those choices. The first paper demonstrates that social, environmental and economic factors such as demographics, neighborhood walkability, and healthy lifestyle traits play an important role in maintaining obesity. This paper does not find unequivocal support for food prices as a driver of obesity. ^ The second paper finds support for the hypothesis that certain types of foods, like sugar, are addictive. In a rational addiction framework, individuals will continue to consume addictive goods even if they are aware of the long term health consequences because past consumption has raised the marginal utility associated with future consumption. This analysis does find that food addicts are still somewhat sensitive to prices leading to the possibility that taxes on addictive goods could reduce consumption. ^ The final paper finds that obesity and overweight are not just problems for the U.S. or rich countries. The underlying shifts in production and consumption that characterize modern economic growth are correlated with obesity. It also finds obesity is becoming an issue for many lower income countries. A preponderance of lower income countries are struggling with a dual burden of malnutrition and obesity. ^