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The Value of Medican and Pharmaceutical Interventions for Reducing Obesity

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  • Pierre-Carl Michaud
  • Dana Goldman
  • Darius Lakdawalla
  • Yuhui Zhen
  • Adam H. Gailey

Abstract

This paper attempts to quantify the private and public economic value of reducing obesity through pharmaceutical and medical interventions. We find that the economic value of such treatments, in particular bariatric surgery, is large for treated patients, with incremental cost-effectiveness ratios typically under $20,000 per life-year saved. Our approach accounts for competing risks to life expectancy, health care cost savings, and other non-medical fiscal consequences. Most of the therapeutic value is generated by longer healthy life expectancy, with modest contributions from health spending, taxes and other spending. Obesity treatment generates substantial per-period savings in medical costs, but it also raises lifetime medical and annuity costs by extending life. On balance, treatment generates substantial private economic value and lowers the prevalence of obesity, but the aggregate fiscal effects on the public-sector are small.

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Bibliographic Info

Paper provided by CIRPEE in its series Cahiers de recherche with number 1109.

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Date of creation: 2011
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Handle: RePEc:lvl:lacicr:1109

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Keywords: Obesity; health spending; ageing; microsimulation;

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  1. repec:reg:rpubli:282 is not listed on IDEAS
  2. Emmanuel Saez & Joel B. Slemrod & Seth H. Giertz, 2009. "The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review," NBER Working Papers 15012, National Bureau of Economic Research, Inc.
  3. Pierre-Carl Michaud & Arthur van Soest, 2004. "Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models," Working Papers 191, RAND Corporation Publications Department.
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  7. Feldstein, Martin, 2008. "Effects of Taxes on Economic Behavior," National Tax Journal, National Tax Association, vol. 61(1), pages 131-39, March.
  8. Christopher J. Ruhm, 2007. "Current and Future Prevalence of Obesity and Severe Obesity in the United States," NBER Working Papers 13181, National Bureau of Economic Research, Inc.
  9. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
  10. Aldy, Joseph E. & Viscusi, W. Kip, 2003. "The Value of Statistical Life: A Critical Review of Market Estimates throughout the World," Working paper 282, Regulation2point0.
  11. Shapiro, Jesse & Glaeser, Edward & Cutler, David, 2003. "Why Have Americans Become More Obese," Scholarly Articles 2640583, Harvard University Department of Economics.
  12. Feldstein, Martin, 2008. "Effects of Taxes on Economic Behavior," Scholarly Articles 2943922, Harvard University Department of Economics.
  13. Lakdawalla, Darius & Philipson, Tomas, 2009. "The growth of obesity and technological change," Economics & Human Biology, Elsevier, vol. 7(3), pages 283-293, December.
  14. Goldman, Dana & Michaud, Pierre-Carl & Lakdawalla, Darius & Zheng, Yuhui & Gailey, Adam & Vaynman, Igor, 2010. "The Fiscal Consequences Of Trends In Population Health," National Tax Journal, National Tax Association, vol. 63(2), pages 307-30, June.
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  17. Giertz, Seth, 2004. "Recent Literature on Taxable-Income Elasticities," MPRA Paper 16159, University Library of Munich, Germany.
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