You Can Never Be Too Rich or Too Thin: Causal Impact of Income on Obesity
- Presenter:
Chair: Tom Selden; Discussant: TBA Tue June 6, 2006 13:45-15:15 Room 226
Over the past 25 years, many countries have experienced increases in obesity, which the World Health Organization attributes in part to increases in income. The link between income and obesity is also important for understanding racial differences in the prevalence of obesity in the U.S., and patterns of obesity across socioeconomic status among women in the U.S. A parallel literature examines whether low-income elderly in the U.S. have poor nutrition. All of these literatures relate to the impact of income on obesity, of which there is little evidence.
This paper estimates the causal impact of income on weight by exploiting a natural experiment: an error in the way Social Security benefits were calculated that led some retirees to receive windfall payments from the Social Security system. We exploit this natural experiment, known as the Social Security benefits notch, by estimating instrumental variables and reduced form models using data from the first wave of the Asset and Health Dynamics Among the Oldest Old (AHEAD). We find evidence that exogenous increases in Social Security income raise weight for relatively light low-income women. These changes in weight are economically meaningful; we estimate that the value of statistical lives saved because of changes in weight caused by the Social Security notch totals $7.4 billion.
