An economy of scales: A selective review of obesity's economic causes, consequences, and solutions.
This paper reviews the economic research on obesity, covering topics such as the measurement of, and trends in, obesity, the economic causes of obesity (e.g. the monetary price and time cost of food, food assistance programs, income, education, macroeconomic conditions, and peer effects), and the economic consequences of obesity (e.g. lower wages, a lower probability of employment, and higher medical care costs). It also examines the extent to which obesity imposes negative externalities, and economic interventions that could potentially internalize such externalities, such as food taxes, subsidies for school-based physical activity programs, and financial rewards for weight loss. It discusses other economic rationales for government intervention with respect to obesity, such as imperfect information, time inconsistent preferences, and irrational behavior. It concludes by proposing a research agenda for the field. Overall, the evidence suggests that there is no single dominant economic cause of obesity; a wide variety of factors may contribute a modest amount to the risk. There is consistent evidence regarding the economic consequences of obesity, which are lower wages and higher medical care costs that impose negative externalities through health insurance. Studies of economic approaches to preventing obesity, such as menu labeling, taxes on energy-dense foods, and financial rewards for weight loss find only modest effects on weight and thus a range of policies may be necessary to have a substantial effect on the prevalence of obesity.
Department of Policy Analysis and Management, Cornell University, United States; Department of Economics, Cornell University, United States; School of Economics, University of Sydney, Australia. Electronic address: JHC38@cornell.edu.
John
J
Cawley
D002908:Chronic Disease / Q000191:economics* / Q000453:epidemiology; D003431:Cross-Cultural Comparison; D004651:Employment / Q000191:economics / Q000639:trends; D057140:Fast Foods / Q000009:adverse effects / Q000191:economics* / Q000600:supply & distribution; D063105:Food Assistance / Q000191:economics* / Q000592:standards / Q000639:trends; D005523:Food Supply / Q000191:economics*; D017048:Health Care Costs / Q000639:trends; D006266:Health Education / Q000191:economics / Q000639:trends; D006801:Humans; D007348:Insurance, Health / Q000191:economics; D009313:National Health Programs / Q000191:economics / Q000639:trends; D009765:Obesity / Q000150:complications / Q000191:economics* / Q000453:epidemiology; D015995:Prevalence; D012111:Residence Characteristics; D012456:Salaries and Fringe Benefits / Q000191:economics / Q000639:trends; D063508:Social Discrimination / Q000191:economics; D014481:United States / Q000453:epidemiology; D061217:Weight Reduction Programs / Q000191:economics / Q000331:legislation & jurisprudence
Diet; Nutrition; Obesity; Physical activity