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Impatience, Incentives, and Obesity

  • Courtemanche, Charles

    ()

    (University of Louisville)

  • McAlvanah, Patrick

    ()

    (Federal Trade Commission)

  • Heutel, Garth

    ()

    (University of North Carolina at Greensboro, Department of Economics)

This paper explores the relationship between time preferences, economic incentives, and body mass index (BMI). Using data from the 2006 National Longitudinal Survey of Youth, we first show that greater impatience increases BMI and the likelihood of obesity even after controlling for demographic, human capital, occupational, and financial characteristics as well as risk preference. Next, we provide evidence of an interaction effect between time preference and food prices, with cheaper food leading to the largest weight gains among those exhibiting the most impatience. The interaction of changing economic incentives with heterogeneous discounting may help explain why increases in BMI have been concentrated amongst the right tail of the distribution, where the health consequences are especially severe. Lastly, we model time-inconsistent preferences by computing individuals' quasi-hyperbolic discounting parameters (β and δ). Both long-run patience (δ) and present-bias (β) predict BMI, suggesting obesity is partly attributable to rational intertemporal tradeoffs but also partly to time inconsistency.

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File URL: http://bae.uncg.edu/assets/research/econwp/2011/11-09.pdf
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Paper provided by University of North Carolina at Greensboro, Department of Economics in its series Working Papers with number 11-9.

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Length: 46 pages
Date of creation: 24 Mar 2011
Date of revision: 28 Sep 2011
Handle: RePEc:ris:uncgec:2011_009
Contact details of provider: Postal: Box 26165, Greensboro, NC 27402-6165
Phone: (336) 334-5463
Fax: (336) 334-4089
Web page: http://www.uncg.edu/bae/econ/

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