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Does Health Insurance Make You Fat?

Author

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

Abstract

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.

Suggested Citation

  • Jay Bhattacharya & Kate Bundorf & Noemi Pace & Neeraj Sood, 2009. "Does Health Insurance Make You Fat?," NBER Working Papers 15163, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15163
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    References listed on IDEAS

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    1. 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.
    2. Darius Lakdawalla & Neeraj Sood & Dana Goldman, 2006. "HIV Breakthroughs and Risky Sexual Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 1063-1102.
    3. David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003. "Why Have Americans Become More Obese?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 93-118, Summer.
    4. 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.
    5. 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 623-648, July-Aug..
    6. Dhaval Dave & Robert Kaestner, 2009. "Health insurance and ex ante moral hazard: evidence from Medicare," International Journal of Health Economics and Management, Springer, vol. 9(4), pages 367-390, December.
    7. Anderson, Patricia M. & Butcher, Kristin F. & Levine, Phillip B., 2003. "Maternal employment and overweight children," Journal of Health Economics, Elsevier, vol. 22(3), pages 477-504, May.
    8. A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1.
    9. Inas Rashad & Sara Markowitz, 2007. "Incentives in Obesity and Health Insurance," NBER Working Papers 13113, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Jay Bhattacharya & Neeraj Sood, 2011. "Who Pays for Obesity?," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 139-158, Winter.
    2. Harold L. Cole & Soojin Kim & Dirk Krueger, 2012. "Analyzing the Effects of Insuring Health Risks: On the Trade-off between Short Run Insurance Benefits vs. Long Run Incentive Costs," NBER Working Papers 18572, National Bureau of Economic Research, Inc.
    3. Augurzky, Boris & Bauer, Thomas K. & Reichert, Arndt R. & Schmidt, Christoph M. & Tauchmann, Harald, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 530, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Charles J. Courtemanche & Daniela Zapata, 2014. "Does Universal Coverage Improve Health? The Massachusetts Experience," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 33(1), pages 36-69, January.
    5. Bhattacharya, Jay & Packalen, Mikko, 2012. "The other ex ante moral hazard in health," Journal of Health Economics, Elsevier, vol. 31(1), pages 135-146.
    6. Manan Roy, 2011. "How Well Does the U.S. Government Provide Health Insurance?," Departmental Working Papers 1102, Southern Methodist University, Department of Economics.
    7. Charles L. Baum & Shin-Yi Chou, 2011. "The Socio-Economic Causes of Obesity," NBER Working Papers 17423, National Bureau of Economic Research, Inc.
    8. Soojin Kim & Dirk Krueger & Harold Cole, 2012. "Analyzing the Effects of Insuring Away Health Risks," 2012 Meeting Papers 609, Society for Economic Dynamics.
    9. Cawley, John & Meyerhoefer, Chad, 2012. "The medical care costs of obesity: An instrumental variables approach," Journal of Health Economics, Elsevier, vol. 31(1), pages 219-230.
    10. Robert Rosenman, 2011. "The public finance of healthy behavior," Public Choice, Springer, vol. 147(1), pages 173-188, April.
    11. Fletcher, Jason M. & Frisvold, David E. & Tefft, Nathan, 2010. "The effects of soft drink taxes on child and adolescent consumption and weight outcomes," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 967-974, December.
    12. repec:zbw:rwirep:0530 is not listed on IDEAS
    13. Dhaval M. Dave & Robert Kaestner & George L. Wehby, 2015. "Does Medicaid Coverage for Pregnant Women Affect Prenatal Health Behaviors?," NBER Working Papers 21049, National Bureau of Economic Research, Inc.
    14. Neeraj Sood & Yanyu Wu, 2013. "The Impact of Insurance and HIV Treatment Technology on HIV Testing," NBER Working Papers 19397, National Bureau of Economic Research, Inc.
    15. Cawley, John, 2015. "An economy of scales: A selective review of obesity's economic causes, consequences, and solutions," Journal of Health Economics, Elsevier, vol. 43(C), pages 244-268.
    16. Xiaobo Peng & Dalton Conley, 2016. "The implication of health insurance for child development and maternal nutrition: evidence from China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(5), pages 521-534, June.
    17. Charles Courtemanche & Garth Heutel & Patrick McAlvanah, 2015. "Impatience, Incentives and Obesity," Economic Journal, Royal Economic Society, vol. 125(582), pages 1-31, February.
    18. Boris Augurzky & Thomas K.Bauer & Arndt R. Reichert & Christoph M. Schmidt & Harald Tauchmann, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 0530, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I1 - Health, Education, and Welfare - - Health

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