The Economic Causes and Consequences of Overweight and Obesity in the United States

Obesity is a serious public health issue, associated with increased risks of premature death, heart disease, diabetes, cancer, breathing problems, arthritis, reproductive complications, and other diseases. There are economic causes and consequences of overweight and obesity. Researchers have recently suggested that the inability of Body Mass Index to appropriately distinguish between body fat and non-body fat components may lead to inaccurate results when analyzing the economics of obesity. I use Percentage Body Fat, defined as Body Fat divided by the sum of Fat-Free Mass and Body Fat, as the primary measure of body composition. A growing body of literature explores the relationship between body composition and income in the United States. There are two views: (1) overweight and obesity lead to lower wages; and (2) low family income and low wages contribute to overweight and obesity. I study both relationships using a dataset comprised of the most recent years of data available in the National Longitudinal Survey of Youth 1979. I find relatively larger effects of body composition on wage levels in Not Worth the Weight: The Relationship between Body Composition and Wages, and relatively smaller effects of family income on body composition in Poor Choices: The Effects of Family Income on Body Composition. In Not Worth the Weight, I hypothesize that the negative impact of body composition increases at higher wage levels because the associated positions require additional education and perhaps a slimmer figure. The results show that for women, the effects of body composition on wage levels are larger than for men, and a higher wage level is associated with a higher wage penalty for being overweight. Poor Choices is unable to prove that low family income has a significantly large impact on body composition. In The Heavy Cost of Healthcare: The Ex Ante Moral Hazard Effect of Health Insurance Possession on Body Composition, I use the National Longitudinal Survey of Youth 1979, augmented with state-level food and tobacco prices, in an attempt to prove there is ex ante moral hazard associated with the possession of health insurance such that the insured are more likely to be overweight or obese. I hypothesize that the effect is larger when an individual is covered by government health insurance and smaller when the individual is covered by private insurance. The analysis shows that the ex ante moral hazard effect is larger when Medicaid covers the individual. When I control for individual fixed effects as well as endogeneity, however, results are insignificant. Thus it is inconclusive whether insurance has an impact on body composition. I conclude with suggestions for future research and effective policies to combat the public health epidemic of overweight and obesity