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Does Health Insurance Make You Fat?

  • Jay Bhattacharya
  • Kate Bundorf
  • Noemi Pace
  • Neeraj Sood

The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions: 1) that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and 2) that body weight decisions are responsive to the incidence of medical care costs associated with obesity. In this paper, we test the latter proposition - that body weight is influenced by insurance coverage - using two approaches. First, we use data from the Rand Health Insurance Experiment, in which people were randomly assigned to varying levels of health insurance, to examine the effect of generosity of insurance coverage on body weight along the intensive coverage margin. Second, we use instrumental variables methods to estimate the effect of type of insurance coverage (private, public and none) on body weight along the extensive margin. We explicitly address the discrete nature of the endogenous indicator of health insurance coverage by estimating a nonlinear instrumental variables model. We find weak evidence that more generous insurance coverage increases body mass index. We find stronger evidence that being insured increases body mass index and obesity.

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File URL: http://www.nber.org/papers/w15163.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15163.

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Date of creation: Jul 2009
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Publication status: published as Does Health Insurance Make You Fat? , Jay Bhattacharya, M. Kate Bundorf, Noemi Pace, Neeraj Sood. in Economic Aspects of Obesity , Grossman and Mocan. 2011
Handle: RePEc:nbr:nberwo:15163
Note: HC HE PE
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  1. Inas Rashad & Sara Markowitz, 2007. "Incentives in Obesity and Health Insurance," NBER Working Papers 13113, National Bureau of Economic Research, Inc.
  2. Dhaval Dave & Robert Kaestner, 2009. "Health insurance and ex ante moral hazard: evidence from Medicare," International Journal of Health Care Finance and Economics, Springer, vol. 9(4), pages 367-390, December.
  3. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
  4. David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003. "Why Have Americans Become More Obese?," Harvard Institute of Economic Research Working Papers 1994, Harvard - Institute of Economic Research.
  5. Patricia M. Anderson & Kristin F. Butcher & Phillip B. Levine, 2002. "Maternal Employment and Overweight Children," NBER Working Papers 8770, National Bureau of Economic Research, Inc.
  6. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
  7. Darius Lakdawalla & Tomas Philipson, 2002. "The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination," Working Papers 0203, Harris School of Public Policy Studies, University of Chicago.
  8. Dana Goldman & Darius Lakdawalla & Neeraj Sood, 2004. "HIV Breakthroughs and Risk Sexual Behavior," NBER Working Papers 10516, National Bureau of Economic Research, Inc.
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