Just as rising gasoline prices are forcing many Americans to tighten their financial belts, new research suggests higher fuel costs may come with a related silver lining — trimmer waistlines.
“An additional $1 in real gasoline prices would reduce obesity in the U.S. by 15 percent after three years,” said Charles Courtemanche, an economics doctoral student in Arts & Sciences.
“In fact, about 13 percent of the rise in obesity between 1979 and 2004 can be attributed to falling real gas prices during the period.”
Courtemanche’s conclusions are based on a comparison of average state fuel prices with health behavior trends documented in government surveys covering two decades, 1984-2004. He provides evidence for two direct and causal links between gasoline prices and obesity.
“If the price of gas rises, the cost of driving also rises, which may affect body weight in two ways,” Courtemanche said.
“First, people may substitute from driving to walking, bicycling or taking public transportation. Walking and bicycling are forms of exercise, which increase calories expended, decreasing weight.
“If a person uses public transportation, such as subways, buses, trolleys or rail services, the need to move to and from the public transit stops is likely to result in additional walking, again decreasing weight.
“Second, since the opportunity cost of eating out at restaurants rises when the price of gas increases, people may substitute from eating out to preparing their own meals at home, which tend to be healthier. People may also eat out less in an effort to save money to pay for the increased cost of gas.”
Titled “A Silver Lining: The Connection Between Gas Prices and Obesity,” Courtemanche’s study touched off a lively debate in online economics groups this summer when findings from his working paper were cited in an article published in The New York Times.
Some suggested that Courtemanche was politically incorrect to suggest a gasoline tax as a means of addressing a larger societal problem, such as an individual’s obesity.
“I’m afraid my findings are being a bit misinterpreted,” Courtemanche said. “I did not intend to imply that additional gasoline taxes would be beneficial for society, just that additional gasoline taxes would reduce obesity.”
Courtemanche points out that his current study makes no attempt to determine whether increased fuel costs would have a positive or negative net impact on social welfare. He sees this question as a possible direction for future research, but cautions that such studies must be careful to take into account all the consequences of increased fuel costs.
“Research shows that reducing people’s incomes would worsen obesity, so any increase in the gasoline tax should be accompanied by mass transit subsidies, payroll tax reductions, or some other policy that replaces the lost income,” he said.
Courtemanche stands behind his numbers and their potential implications for policy decisions. As a health economist, he argues that such potential is too important to be overlooked.
According to his analysis, the reduction in obesity caused by a $1 increase in gasoline prices would save 16,000 lives and $17 billion a year.
While classical economic theory suggests that welfare is maximized by staying out of people’s way, Courtemanche argues that some policy intervention may be necessary in dealing with the obesity epidemic, in part, because the problem falls into a special category known to economists as a “market failure.”
“One of the most common market failures is an externality, which is where your action affects others,” he said. “This is why we have cigarette taxes — secondhand smoke creates a negative externality, so it is possible that government intervention would improve social welfare.”
Despite the fact that eating and exercise are personal choices, intervention may be justified because an individual’s obesity may have a negative impact on society, he said.
“With obesity, the most obvious negative externality is medical expenses,” Courtemanche said. “Because of public insurance (Medicare and Medicaid), the medical expenses of obese people are often paid for by taxpayers. For people with private insurance, their medical expenses increase everyone’s premiums.
“In short, then, the argument that weight is a personal choice and should not be interfered with breaks down because of our insurance system. Other market failures that may also apply to obesity are addiction and lack of perfect information, such as not knowing how many calories are in the food you eat at restaurants. Again, that doesn’t necessarily mean the gas taxes are the best policy, just that some obesity-reducing policy may be appropriate.”