An Economic Analysis Of Adult Obesity

Summary of working paper 9247
Featured in print Digest

The incidence of obesity is most prevalent among those sectors of the workforce (chiefly low-end wage earners, women, non-whites) whose real income has fallen even as more hours are devoted to work.

Not all that long ago obesity was a fairly rare phenomenon among Americans. By now, however, it's well-established that the number of obese adults in the United States has grown by more than 50 percent over the last generation. Less well known is that obesity and its attendant sedentary lifestyle result in 300,000 premature deaths annually, a toll second only to the early mortality figure attributed to smoking. In addition, the annual costs of medical treatment for obesity have been estimated at nearly $100 billion. And the prevalence of obesity continues to increase.

For these reasons, authors Shin-Yi Chou, Henry Saffer, and Michael Grossman attempt to determine the root economic causes of the obesity epidemic in An Economic Analysis of Adult Obesity: Results from the Behavioral Risk Factor Surveillance System (NBER Working Paper No. 9247). The researchers confirm some conventional thinking on the subject, for example that the increase in the incidence of obesity and the doubling of the per capita number of fast-food restaurants between 1972 and 1997 are related phenomena. (In addition, the per capita number of full-service restaurants rose by 35 percent in the same period.) But Chou, Saffer, and Grossman also address why the reliance on convenience meals and restaurants has grown so markedly. They find a large part of the answer in labor market developments since 1970 and in attendant matters of incomes and costs, in the proliferation of women in the workforce, and in the value of time in regard to both work and leisure.

The authors rely on comprehensive data collected in recent years in the Behavioral Risk Factor Surveillance System telephone surveys conducted by state health departments in conjunction with the Centers for Disease Control. These surveys clearly document the growth of obesity and also identify which segments of the population (by age, gender, race, marital status, educational background, and the like) are experiencing such growth. The researchers combine this information with data on the decline in real income since 1970 -- most notably among single-earner households and for unmarried men and women -- and the increase in real income for married-couple households which is largely attributable to the entry of women into the workforce.

Their analysis shows that more time devoted to work and less time devoted to the labor-intensive activity of food preparation in the home favors the low cost and convenience of fast food and prepared food. These foods have extremely high caloric density, are satisfying and habit forming, and they almost certainly contribute to the obesity epidemic. For this reason, the incidence of obesity is most prevalent among those sectors of the workforce (chiefly low-end wage earners, women, non-whites) whose real income has fallen even as more hours are devoted to work.

The researchers acknowledge that food prepared in the home is nominally cheaper than purchasing food in restaurants. But in view of the value of time that must be devoted to shopping and cooking, as compared to the high-calorie, low-cost, mass-production meals available at ever-increasingly convenient locations (with ever diminishing travel and waiting time), the fast-food option appears to make good economic, if not health, sense.

Chou, Saffer, and Grossman find similar revealing results in their analysis of another consumer trend of the same period, the dramatic reduction in smoking. Cigarette smokers have higher metabolic rates than non-smokers and on average consume fewer calories than non-smokers. The cost of cigarettes, because of higher taxation, has risen 164 percent between 1980 and 2001 and is believed to have helped reduce smoking rates. Clean indoor air regulations (the restricting of smoking in restaurants, bars, public buildings, and the like) meanwhile have taken effect in areas that now include 42 percent of the population and likewise are believed to contribute to the decline of smoking. But ex-smokers typically gain weight. The evidence does not yet support a direct correlation between restrictions on smoking and weight gain, but it strongly suggests that the upward trend in obesity is at least partly attributable to the anti-smoking campaign.

The NBER study concludes with a cautionary note. It is easy, the researchers suggest, to identify fast-food outlets as the culprits in the obesity epidemic; indeed, the mere increase in the number of restaurants in a given area seems to cause a parallel increase in the incidence of obesity. But to end there is to ignore the demand for the restaurant option. In other words, fast-food or convenience meals should rightly be considered as much an effect as a cause in American eating patterns. With more household time going to market work, correspondingly less time and energy are available for home activities such as food preparation. The increases in hours worked and in rates of labor force participation, the reductions in wage rates, and the declines or at best the modest increases in real income experienced by some sectors appear to have stimulated the demand for inexpensive and convenient prepared meals, which has increased caloric intake. Concurrently, reduced time available for active leisure has reduced the burning of calories.

Expanded work opportunities for women, like the successful campaign to reduce smoking, appear to have the unintended consequences of increasing the incidence of obesity. Chou, Saffer, and Grossman conclude by urging that further study be done to determine the feasibility of promoting public policies that might offset these undesirable consequences.

-- Matt Nesvisky