Welfare-Enhancing Technological Change and the Growth of Obesity by Darius Lakdawalla, Tomas Philipson and Jay Bhattacharya. Published in volume 95, issue 2, pages 253-257 of American Economic Review, May 2005

This paper analyzes the forces contributing to the worldwide long-run rise in obesity and the role of public interventions in affecting its continued growth. A growth in obesity in a population must result from the growth of calorie consumption outpacing the growth of physical activity. Yet historically in developed countries, obesity has grown with modest rises in calorie consumption and with a substantial increase in both exercise and dieting. We consider the economic incentives that give rise to the long-run growth in obesity by stimulating intake of calories at the same time as discouraging the expending of calories on physical activity, whether in work or leisure. We argue that technological change provides a natural interpretation of the long-run growth in obesity, that it predicts that the effect of income on obesity changes from positive to negative with economic development, and that it implies that technological change may not continue to raise weight. We discuss the positive and normative impacts of direct and indirect public interventions to reduce obesity.

We use panel data from the National Longitudinal Survey of Youth to investigate on-the-job exercise and weight. For male workers, job-related exercise has causal effects on weight, but for female workers, the effects seem primarily selective. A man who spends 18 years in the most physical fitness-demanding occupation is about 25 pounds (14 percent) lighter than his peer in the least demanding occupation. These effects are strongest for the heaviest quartile of men. Conversely, a male worker spending 18 years in the most strength-demanding occupation is about 28 pounds (15 percent) heavier than his counterpart in the least demanding job.

The United States spends more on health care than other developed countries, but some argue that US patients do not derive sufficient benefit from this extra spending. We studied whether higher US cancer care costs, compared with those of ten European countries, were “worth it” by looking at the survival differences for cancer patients in these countries compared to the relative costs of cancer care. We found that US cancer patients experienced greater survival gains than their European counterparts; even after considering higher US costs, this investment generated $598 billion of additional value for US patients who were diagnosed with cancer between 1983 and 1999. The value of that additional survival gain was highest for prostate cancer patients ($627 billion) and breast cancer patients ($173 billion). These findings do not appear to have been driven solely by earlier diagnosis. Our study suggests that the higher-cost US system of cancer care delivery may be worth it, although further research is requi...