The Medical Care Costs of Obesity: An Instrumental Variables Approach
This paper is the first to use the method of instrumental variables (IV) to estimate the impact of obesity on medical costs in order to address the endogeneity of weight and to reduce the bias from reporting error in weight. Models are estimated using data from the Medical Expenditure Panel Survey for 2000-2005. The IV model, which exploits genetic variation in weight as a natural experiment, yields estimates of the impact of obesity on medical costs that are considerably higher than the correlations reported in the previous literature. For example, obesity is associated with $676 higher annual medical care costs, but the IV results indicate that obesity raises annual medical costs by $2,826 (in 2005 dollars). The estimated annual cost of treating obesity in the U.S. adult non-institutionalized population is $168.4 billion or 16.5% of national spending on medical care. These results imply that the previous literature has underestimated the medical costs of obesity, resulting in underestimates of the cost effectiveness of anti-obesity interventions and the economic rationale for government intervention to reduce obesity-related externalities.
|Date of creation:||Oct 2010|
|Publication status:||published as in the Journal of Health Economics Volume 31, Issue 1, January 2012, Pages 219–230|
|Note:||AG HC HE PE|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Partha Deb & Pravin K. Trivedi, 2006. "Maximum simulated likelihood estimation of a negative binomial regression model with multinomial endogenous treatment," Stata Journal, StataCorp LP, vol. 6(2), pages 246-255, June.
- Partha Deb & Pravin K. Trivedi, 2006. "Specification and simulated likelihood estimation of a non-normal treatment-outcome model with selection: Application to health care utilization," Econometrics Journal, Royal Economic Society, vol. 9(2), pages 307-331, 07.
- Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July.
- Jason M. Fletcher & David Frisvold & Nathan Tefft, 2010.
"Can Soft Drink Taxes Reduce Population Weight?,"
Contemporary Economic Policy,
Western Economic Association International, vol. 28(1), pages 23-35, 01.
- Manning, Willard G. & Mullahy, John, 2001.
"Estimating log models: to transform or not to transform?,"
Journal of Health Economics,
Elsevier, vol. 20(4), pages 461-494, July.
- Willard G. Manning & John Mullahy, 1999. "Estimating Log Models: To Transform or Not to Transform?," NBER Technical Working Papers 0246, National Bureau of Economic Research, Inc.
- Schroeter, Christiane & Lusk, Jayson & Tyner, Wallace, 2008. "Determining the impact of food price and income changes on body weight," Journal of Health Economics, Elsevier, vol. 27(1), pages 45-68, January.
- 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.
- John Cawley & Richard V. Burkhauser, 2006. "Beyond BMI: The Value of More Accurate Measures of Fatness and Obesity in Social Science Research," NBER Working Papers 12291, National Bureau of Economic Research, Inc.
- John Cawley, 2004. "The Impact of Obesity on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
- Jay Bhattacharya & Neeraj Sood, 2005. "Health Insurance and the Obesity Externality," NBER Working Papers 11529, National Bureau of Economic Research, Inc.
- Markus Frolich & Blaise Melly, 2010. "Estimation of quantile treatment effects with Stata," Stata Journal, StataCorp LP, vol. 10(3), pages 423-457, September.
- Neil Mehta & Virginia Chang, 2009. "Mortality attributable to obesity among middle-aged adults in the united states," Demography, Springer;Population Association of America (PAA), vol. 46(4), pages 851-872, November.
- Alberto Abadie & Joshua Angrist & Guido Imbens, 1999.
"Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings,"
99-16, Massachusetts Institute of Technology (MIT), Department of Economics.
- Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
- Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
- Shiell, Alan & Gerard, Karen & Donaldson, Cam, 1987. "Cost of illness studies: An aid to decision-making?," Health Policy, Elsevier, vol. 8(3), pages 317-323, December.
- Marquis, M. Susan & Long, Stephen H., 1995. "Worker demand for health insurance in the non-group market," Journal of Health Economics, Elsevier, vol. 14(1), pages 47-63, May.
- Steven C. Hill & G. Edward Miller, 2010. "Health expenditure estimation and functional form: applications of the generalized gamma and extended estimating equations models," Health Economics, John Wiley & Sons, Ltd., vol. 19(5), pages 608-627.
- Frazis, Harley & Loewenstein, Mark A., 2003. "Estimating linear regressions with mismeasured, possibly endogenous, binary explanatory variables," Journal of Econometrics, Elsevier, vol. 117(1), pages 151-178, November.
- John Komlos & Marek Brabec, 2010. "The Trend of Mean BMI Values of US Adults, Birth Cohorts 1882-1986 Indicates that the Obesity Epidemic Began Earlier than Hitherto Thought," NBER Working Papers 15862, National Bureau of Economic Research, Inc.
- 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.
- James W. Hardin & Henrik Schmeidiche & Raymond J. Carroll, 2003. "Instrumental variables, bootstrapping, and generalized linear models," Stata Journal, StataCorp LP, vol. 3(4), pages 351-360, December.
- Gruber, Jonathan & Washington, Ebonya, 2005. "Subsidies to employee health insurance premiums and the health insurance market," Journal of Health Economics, Elsevier, vol. 24(2), pages 253-276, March.
- Jay Bhattacharya & Neeraj Sood, 2011. "Who Pays for Obesity?," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 139-58, Winter.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:16467. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.