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The self-reinforcing dynamics of economic insecurity and obesity

Author

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  • Nicholas Rohde
  • KK Tang
  • Lars Osberg

Abstract

This article models the dynamic effects of economic insecurity on body weight. Using Australian panel data, we infer an individual’s level of economic insecurity as a function of exposure to various financial risks and employ regression equations to explore its effect upon current period body mass index (BMI) scores. Estimates reveal that a sustained standard deviation increase in economic insecurity raises an individual’s BMI at a rate of approximately 0.35 units per year. Quantile regressions are then used to estimate the sensitivity of body weight to insecurity at different percentiles of the distribution and we find that persons who are overweight and obese are much more seriously affected. This implies that shocks that make individuals more financially vulnerable can generate harmful self-sustaining cycles of risk and weight gain. We also model the dynamics of insecurity and show that it is a persistent phenomenon for persons with high levels of exposure and lower incomes. This finding indicates that persons of lower socio-economic status are more likely to encounter vicious cycles of increasing insecurity and obesity, which partially explains why weight-related health problems are unusually highly concentrated amongst these individuals.
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Suggested Citation

  • Nicholas Rohde & KK Tang & Lars Osberg, 2016. "The self-reinforcing dynamics of economic insecurity and obesity," Discussion Papers in Economics economics:201601, Griffith University, Department of Accounting, Finance and Economics.
  • Handle: RePEc:gri:epaper:economics:201601
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    References listed on IDEAS

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    1. Ferrie, Jane E. & Shipley, Martin J. & Marmot, Michael G. & Stansfeld, Stephen & Smith, George Davey, 1998. "The health effects of major organisational change and job insecurity," Social Science & Medicine, Elsevier, vol. 46(2), pages 243-254, January.
    2. Offer, Avner & Pechey, Rachel & Ulijaszek, Stanley, 2010. "Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality," Economics & Human Biology, Elsevier, vol. 8(3), pages 297-308, December.
    3. repec:aph:ajpbhl:1998:88:7:1030-1036_7 is not listed on IDEAS
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    5. Smith Trenton G. & Stoddard Christiana & Barnes Michael G, 2009. "Why the Poor Get Fat: Weight Gain and Economic Insecurity," Forum for Health Economics & Policy, De Gruyter, vol. 12(2), pages 1-31, June.
    6. Trenton Smith, 2009. "Reconciling psychology with economics: Obesity, behavioral biology, and rational overeating," Journal of Bioeconomics, Springer, vol. 11(3), pages 249-282, December.
    7. Offer, Avner & Pechey, Rachel & Ulijaszek, Stanley, 2010. "Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality," Economics & Human Biology, Elsevier, vol. 8(3), pages 297-308, December.
    8. repec:cup:apsrev:v:106:y:2012:i:02:p:386-406_00 is not listed on IDEAS
    9. Jérôme Adda & James Banks & Hans-Martin von Gaudecker, 2009. "The Impact of Income Shocks on Health: Evidence from Cohort Data," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1361-1399, December.
    10. Cheng, Yawen & Chen, Chun-Wan & Chen, Chiou-Jong & Chiang, Tung-liang, 2005. "Job insecurity and its association with health among employees in the Taiwanese general population," Social Science & Medicine, Elsevier, vol. 61(1), pages 41-52, July.
    11. Barnes Michael G & Smith Trenton G., 2009. "Tobacco Use as Response to Economic Insecurity: Evidence from the National Longitudinal Survey of Youth," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-29, November.
    12. Burkhauser, Richard V. & Cawley, John, 2008. "Beyond BMI: The value of more accurate measures of fatness and obesity in social science research," Journal of Health Economics, Elsevier, vol. 27(2), pages 519-529, March.
    13. Rohde, Nicholas & Tang, K.K. & Osberg, Lars & Rao, Prasada, 2016. "The effect of economic insecurity on mental health: Recent evidence from Australian panel data," Social Science & Medicine, Elsevier, vol. 151(C), pages 250-258.
    14. Green, Francis, 2011. "Unpacking the misery multiplier: How employability modifies the impacts of unemployment and job insecurity on life satisfaction and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 265-276, March.
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    Cited by:

    1. Rohde, Nicholas & Tang, Kam Ki & Osberg, Lars & Rao, D.S. Prasada, 2017. "Is it vulnerability or economic insecurity that matters for health?," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 307-319.
    2. Lars Osberg, 2018. "Full Employment in Canada in the early 21st Century," Working Papers daleconwp2018-02, Dalhousie University, Department of Economics.
    3. Nancy Kong & Lars Osberg & Weina Zhou, 2018. "The Shattered “Iron Rice Bowl†— Intergenerational Effects of Economic Insecurity During Chinese State-Owned Enterprise Reform," Discussion Papers Series 595, School of Economics, University of Queensland, Australia.
    4. Marina Romaguera de la Cruz, 2017. "Economic insecurity in Spain: A multidimensional analysis," Working Papers 448, ECINEQ, Society for the Study of Economic Inequality.
    5. Nancy Kong & Lars Osberg & Weina Zhou, 2018. "The Shattered “Iron Rice Bowl”— Intergenerational Effects of Economic Insecurity During Chinese State- Owned Enterprise Reform," Working Papers daleconwp2018-01, Dalhousie University, Department of Economics.

    More about this item

    Keywords

    Economic Insecurity; Body Mass Index; Health Economics; Obesity;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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