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Friday, August 25, 2006

The economics of fat.

Are we fat because we're prosperous? I've been assuming the "obesity epidemic" -- hmmm, what if it were contagious? -- is mostly a result of affluence. It's easy to get food, and we can relax a lot physically. We don't have to exercise to get our food, and we have lots of time sitting around not only not exercising but in a good position to eat the food that's always available. It's totally normal, under the circumstances, to get fat. You have to fight nature to avoid getting fat. Anyway, that's my casual observation.

At the link, economist Darius Lakdawalla debates the question with public policy professor Carol Graham. A key issue is why poor people are fatter than rich people.
Graham: While it is extremely difficult to precisely isolate the effects of norms and expectations versus those of cheap food and sedentary lifestyles, it seems very plausible that differences in the former set of factors play some role in explaining differences in incidence. Our research suggests that stigma against obesity is much lower in some racial, socioeconomic, and professional groups than others, and that accords with the higher obesity rates among those groups. It also suggests that obese people are less likely to experience mobility into higher status professions where obesity is rarer....

Lakdawalla:
[I]ncentives explain the variation between rich and poor at least as well as social norms. The seminal work of Michael Grossman, in 1972, argued that richer and more educated people have higher demands for health, because they stand to lose morein the way of lifetime income if they die young. Dr. Graham's examples make this point as well. For instance, she cites recent work by Jay Bhattacharya and Kate Bundorf that shows "discrimination against overweight and obese individuals is higher in higher status professions." In fact, Bhattacharya and Bundorf argue that people with health insurance face a larger wage penalty if they are obese, because their employers end up paying for their higher medical costs. They rely on incentives, not social norms, in explaining the phenomena they observe. Incentives also have several important practical advantages over social norms. Norms-based theories always involve a "chicken-and-egg" type problem. Are people fatter because it is more acceptable to be fat, or did it become more acceptable when more people got fat? Finally, and perhaps most importantly, it is often difficult to act on a theory of social norms, because policymakers can change incentives much more easily than social norms.

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