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Pound Wise and Penny Foolish? Weight Loss and The Dynamics of Health Care Spending

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  • Koch Thomas G

    (University of California, Santa Barbara, koch@econ.ucsb.edu)

Abstract

Current estimates of obesity costs ignore the impact of future weight loss and gain, and may either over or underestimate economic consequences of weight loss. In light of this, I construct static and dynamic measures of medical costs associated with body mass index (BMI), to be balanced against the cost of one-time interventions. This study finds that ignoring the implications of weight loss and gain over time overstates the medical-cost savings of such interventions by an order of magnitude. When the relationship between spending and age is allowed to vary, weight-loss attempts appear to be cost-effective starting and ending with middle age. Some interventions recently proven to decrease weight may also be cost-effective.

Suggested Citation

  • Koch Thomas G, 2011. "Pound Wise and Penny Foolish? Weight Loss and The Dynamics of Health Care Spending," Forum for Health Economics & Policy, De Gruyter, vol. 14(1), pages 1-17, July.
    • Handle: RePEc:bpj:fhecpo:v:14:y:2011:i:2:n:7
    DOI: 10.2202/1558-9544.1220
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    References listed on IDEAS

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    1. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, May.
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    Keywords

    BMI; medical costs; dynamics; obesity;
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