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Gas Prices and Obesity:

Here is an interesting paper by Washington University economist Charles Courtemanche, "A Silver Lining? The Connection between Gas Prices and Obesity," recently posted on SSRN.

Rising gasoline prices have become a major concern in the U.S. over the past few years. An increase in the cost of driving causes people to consider substitutes, such as walking and taking public transportation, both of which are likely to result in additional physical exertion. Since exercise is known to decrease body weight, it is possible that the recent escalation in gas prices will have the silver lining of reducing America's obesity rate. This has the potential to significantly improve public health since obesity, which is widely believed to be one of the leading causes of preventable deaths in the U.S., can lead to a number of diseases, such as heart disease and diabetes. I find that a $1 increase in real gasoline prices will, in the long run, lower the prevalence of obesity in the U.S. by about 1/3 and save approximately 40,000 lives and $40 billion per year. I also find direct evidence that this effect occurs through increasing low-intensity exercise, such as walking. Additionally, I estimate that 3-8% of the rise in obesity in the U.S. between 1979 and 2004 can be attributed to declining real gas prices during the period.

Coke is it (mail):
"3-8% of the rise in obesity in the U.S. between 1979 and 2004 can be attributed to declining real gas prices during the period."

If you believe that, I have some land in Florida you might want to look at.

Seriously. Gas prices are not going to have an effect on anything. It is so inelastic precisely because of this. Fatsos out there are driving inefficient cars. The states with the worst obesity also have the most SUVs and fewest Priuses. Go check out Houston and Rhode Island.

All but the very very very poorest in this country can afford a LOT of food and a couple of nice TVs and their gasoline. Half the kids in high school can, for crying out loud.

Lastly, what in the world is wrong with being overweight? It's the natural and evolved state of normal people who have access to food choices to become fat. It's fun to eat and it's not fun to exercise (if you disagree you are tricking yourself). Who in the world actually wants to be 80? Live free and die!
6.19.2007 12:43am
Tennessean (mail):
As anecdotal evidence: Previously, I lived in a city where I consumed only fried foods and beer, and I consumed lots of both. However, I did not have a car. Then, I moved to a city where my diet improved dramatically and my beer intake went down to probably a tenth of its prior level, but I had to drive. My weight in the second city is 15% higher than it was in the first city.

However, regarding Coke is it's comments, I cannot ever remember adjusting my driving level on the basis of the price of gasoline. Indeed, I am not significantly more aware now of the cost of a gallon of gas than I was before I moved (when I had no car).
6.19.2007 12:48am
Curt Fischer:
Hey! This is related to the thread the other day on corn ethanol.

A not-necessarily-ridiculous line of logic goes: gas prices are high, hence a push for ethanol. A push for ethanol, hence increased demand for corn, hence increased corn prices. Hence increased prices of corn-derived food products such as high-fructose corn syrup. Hence higher relative prices for foods high in corn sweeteners. Hence (hopefully), increased consumer preference for foods lower in corn sweeteners, and less obesity!

I don't really believe all these logical leaps, or at least, I have not seen compelling evidence for many of them, but it does strike me as an interesting scenario.
6.19.2007 1:03am
Eli Rabett (www):
If pigs were horses cows would exercise. How many things have to fall wierd for this thing to work.
6.19.2007 1:19am
Randy R. (mail):
We have a god-given right to be fat, and no liberal is going to force me to be healthy!
6.19.2007 2:10am
Doc (in China) (mail):
Just because the connection is ludicrous, don't think there won't be people pushing it as a reason for policy changes. For the children, of course.
6.19.2007 3:13am
A. Zarkov (mail):
Who in the world actually wants to be 80?

People aged 79.
6.19.2007 4:04am
theobromophile (www):
The scenario would work, until you factor in the fact that skinnier Americans would use less gas. For example, every year, airlines use 350 million gallons of extra fuel hauling around obese Amerians; supposedly, Americans also use 938 million extra gallons of automobile fuel every year.

Ergo, as rising fuel prices cause fat Americans to walk or bike and therefore lose weight, they will consume less fuel (being lighter), which will, in turn, reduce the cost of fuel and cause the now-slender Americans to drive again and regain all the weight that they lost.

Ya win some, ya lose some.
6.19.2007 4:50am
ATRGeek:
I agree the hypothesis sounds somewhat goofy, but if you look at the actual paper, there is some pretty good data and analysis to back up the reported results.

Incidentally, for those who think the results are still counterintuitive, it may help to realize that the observed effect occurs over a long period of time (around six years after the gas price increase). So, the results are consistent with the short-term inelasticity of gasoline consumption. Similarly, the estimated period of the effect gives a chance for longer-term mechanisms to take place (eg, when you next move, you might be more likely to move somewhere within walking distance of public transportation, shopping, etc.). Finally, the author hypothesizes a gradual positive feedback mechanism (as you lose weight, the costs of walking decrease).
6.19.2007 6:56am
triticale (mail) (www):
Now factor automobile accident rates into the statistics and see which way they shift. Note, when doing so, that the most recent such deaths in Milwaukee involve pedestrians hit by cars.
6.19.2007 9:14am
AppSocRes (mail):
What does the phrase "save approximately 40,000 lives" actually mean. My academic background includes substantial training in demography and epidemiology and I often earn my living doing statistical analyses and still I'm not really sure.

Does this mean that the average life-expectancy of Americans will be increased by (40,000 person-years)/(300,000,000 persons). If so this amounts to a little over an hour of additional life per person? Or does it mean something else?

I'm not sure that being able to watch two additional Seinfeld re-runs is worth the costs the authors are considering.
6.19.2007 9:30am
ATRGeek:
AppSocRes,

The paper explains the relevant methodology on pages 19 and 20. The economic point is basically that in addition to extending life expectancy, it will save on annual health care costs, which would offset some (but not all) of the economic costs of a $1 increase in gas prices (specifically, the estimate is that the health care savings would offset about 28-32% of the costs of higher gasoline).
6.19.2007 9:50am
ATRGeek:
By the way, I gather the author for the purposes of that calculation is assuming the $1/gallon increase is just removed from the social welfare equation. That need not be the case, of course. For example, a $1/gallon tax which was then immediately returned to taxpayers on a per capita basis might capture the health benefits without imposing a net tax cost (of course, there would be a net wealth transfer between high gasoline consumers to low gasoline consumers, but that would be the point).

Of course, there would be some net costs, but in this tax-and-return scenario they would be the costs of switching transportation patterns, not the higher costs of the gasoline per se,
6.19.2007 10:10am
John Thacker (mail):
I cannot ever remember adjusting my driving level on the basis of the price of gasoline.

Perhaps not, but while gasoline demand is relatively inelastic in the short term, it is somewhat elastic in the medium and long term. One of the strongest effects is affecting what new cars people choose to buy. In any case, it's rather indisputable that gasoline consumption declined year-to-year in the US with the higher prices, for the first year over year decline in the raw amount (not to mention the per-capita decrease) in decades. Of course, one can say that it's still not elastic enough if in the short term to make a difference; that's a more technical question.
6.19.2007 10:21am
whackjobbbb:
No doubt, it'd be hard to be make a direct connection between gasoline prices and obesity levels. But intuitively, we can expect that as gasoline prices increase, there will also be an increase in the total amount of miles walked in this country.

And yes, the ethanol scam has jacked-up corn prices considerably. Will this have an effect on obesity? Again hard to connect the 2, but the price increase will move people away from corn sugars, for sure. And I'd note the increase in food costs recently, which may be related to the ethanol policy also.
6.19.2007 10:49am
Andy Freeman (mail):
> But intuitively, we can expect that as gasoline prices increase, there will also be an increase in the total amount of miles walked in this country.

Not so fast. Many folks drive to the gym, to parks to walk, and so on; driving enables their exercise. If they don't take those trips, they walk/exercise differently, and probably less.
6.19.2007 10:56am
Andy Freeman (mail):
> For example, a $1/gallon tax which was then immediately returned to taxpayers on a per capita basis might capture the health benefits without imposing a net tax cost (of course, there would be a net wealth transfer between high gasoline consumers to low gasoline consumers, but that would be the point).

The above assumes that the "can be replaced by walking" trips dominate. I suspect that they're actually a small minority.

For example, gas consumption is strongly affected by commute distance. If mass transit is unavailable, there's no possible health benefit - it's just extra taxes. (And, if mass transit is available, it isn't necessarily appropriate or cheaper. Remember, most folks can't avoid average costs, they can only avoid marginal costs, and mass transit is rarely lower than the latter and often higher than the former.)
6.19.2007 11:05am
Hans Bader (mail):
What would really save lives is restoring the sense of shame that used to be associated with being fat before the advent of political correctness and the therapeutic culture.

Americans used to lose weight to avoid social disapproval. Now they prattle about "fat acceptance" and "size discrimination" and "inner beauty." They claim it makes them happy to be fat, but they die sooner from obesity-related diseases.

Which is worse? A little social stigma that motivates you to be healthy? Or death from obesity?

The increasing social stigma of smoking has cut smoking rates. The decreasing social stigma of being fat has increased obesity rates.

In France, people are still not quite as fat as here, even though French food (foie gras, etc.) is far from lean, because fat people are looked down upon, causing some of them to lose weight.

As my (French-born) wife's best friend said (disapprovingly), "here in France, it is a shame to be fat."

I don't disapprove of such feelings of shame at all. If someone is grossly fat, and has no medical condition causing it, their sense of shame may motivate them to lose weight and become healthy.

Even in France, though, the shame associated with being fat is diminishing as the country becomes more politically correct.

We need to amend state disabilities laws so that obesity is not deemed a disability -- and legislatively clarify that the few federal court decisions suggesting that obesity is a disability are erroneous interpretations of the Americans with Disabilities Act.

That would send a message of personal responsibility.

Obese people would be better off, after a short period of discomfort, if shame motivated them to lose weight.

And the country would be better off, saving hundreds of billions of dollars in health care costs, and millions of dollars installing larger seats in ferries, stadiums, airplanes, and buses.
6.19.2007 11:06am
ATRGeek:
Andy,

The study looks into this a bit, although the available data on exercise patterns was limited. The upshot, though, is that the author concluded that the observable effects of gasoline prices on heavy/recreational exercise were small and statistically insignificant, and the effects on light/functional exercise were large and statistically significant.

Intuitively I think that makes sense. First, for many people functional exercise is going to outweigh recreational exercise (and indeed many people may not engage in much if any recreational exercise). And apparently that is what the data showed (the average individual engaged in light/functional exercise about twice as often as heavy/recreational exercise).

Second, to the extent people were driving personal vehicles to places to engage in recreational exercise, all the same long-term substitution effects could apply to those incidences of driving. For example, just as you could move to somewhere within walking distance (or walking distance to public transportation) of work, shoppig, and other entertainment venues, you could also move within walking distance of your favorite gym, park, playground, and so on. Of course, that could be a collective decision (you could move to a place within walking distance of, or walking distance of public transportation to, some or all of those things--work, shopping, entertainment and exercise venues, etc.--combined).

Generally, it seems intuitively implausible to me that the frequency of heavy/recreational exercise would be so responsive to gas prices that any such effects would outweigh the effects of gas prices on light/functional exercise. And again, that is what the data indicated.
6.19.2007 11:25am
ATRGeek:
Andy,

In response to your second post:

First, keep in mind that with a tax-and-return scheme, there are no extra taxes on an aggregate basis no matter what happens.

Second, you are right that building out additional mass transit may or may not be the most efficient response to higher gasoline taxes (although bus services in particular tend to be pretty darn efficient for routine local travel, such as to work, shopping, and entertainment, and they have the additional benefit of being easily switchable to gasoline alternatives). But as the study suggests, over a period like six years, something like "commute distance" actually becomes a variable as well. In other words, during their next move, people might be more likely to choose to move within walking distance of existing mass transit option if gasoline prices are higher.

In general, we already knew that gasoline usage is at least somewhat elastic in the medium and long term. So, the proposition that a $1/gallon tax-and-return scheme would likely decrease relative gasoline usage in the medium-to-long term is pretty uncontroversial. What this study does is just add the suggestion that a likely side-effect will be reduced health care costs, and do a little work toward estimating the size of that effect.

Again, I though, I don't want to create the impression that I believe this is all costless. For example, even if people move to the existing mass transit rather than the existing mass transit being built out to the people, presumably there is some sort of cost involved in people making this switch (perhaps both to them and to the transit system). That said, one would likely expect other beneficial effects to such changes (eg, population concentration tends to lead to other energy efficiencies, such as for heating/cooling, power transmission, food transport, and so on). So, it strikes me as intuitively plausible that the net externality effects would be very high relative to the switching costs.

Again, though, I think the benefit of this study is just that it begins to quantify one of the possible externality benefits of higher gas prices. And it turns out to be a pretty significant effect, which to me is an interesting and intriguing result.
6.19.2007 11:44am
ATRGeek:
Hans,

What is your evidence that conscious efforts to encourage social stigmatization actually work? Note that there are at least two ways they could fail: society could prove resistant to your efforts, and even if society went along with your agenda, society could fail to motivate significant changes in individual behavior.

By the way, I believe automobile use relative to mass transit use has been increasing in Europe. I might suggest that as an alternative hypothesis about one of the primary contributing factors to increased obesity in Europe. I might further suggest that increased social tolerance of obesity could be an effect, not a cause, of increased obesity rates.
6.19.2007 11:53am
Randy R. (mail):
Funny. There was an article in the WAshington Post just the other day about cluster mailboxes. Seems that all these big subdivisions create more work for the Post Office, so now instead of having a mail carrier come to each house, they just deliver mail to one central location. It saves them time and money.

So of course the suburbanites are up in arms. The mailboxes are so far away from their house! They have to walk so far to get their mail! They might even have to say hello to a neighbor doing the exact same thing at the same time! Their house just isn't complete without a mailbox.

So I guess they should have their mailbox, but will then then complain when stamps have to increase to cover the increased costs? Of course they will! Because free mail service to your door is a right, dammit, and you don't mess with the rights of a fat, lazy American.
6.19.2007 12:00pm
gab:
So we should really thank OPEC?
6.19.2007 12:07pm
WHOI Jacket:
How far does this supposed correlation go out? If we raise gas to $10 a gallon, will we have a nation of Lance Armstrongs?
6.19.2007 1:35pm
Sigivald (mail):
Randy: Funny indeed - in the past, before centalised mail drops, rates were lower. We didn't see a drop in rates (or even, to my knowledge, a more significant flatness in rates) when consolidated mail drops started to become popular.

Why would rates thus go up if subdivisions had individual mailboxes rather than centralised drops?

Fat and lazy? What about the traditional hominess of having your own mailbox? What about the old and infirm? Shall we sacrifice them on the altar of notionally being thin and exercised by adding useless inconvenience to our lives?

(I submit that nobody is thin or not lazy because they have to walk a block to get their mail; those that are fat and lazy will be so in any case; those that are thin or not lazy will, likewise, be so even if they don't have to walk a block to get their mail.)

(And who wants to interact with neighbors? Why should anyone particularly want to?

But who'd let annoying problems like these get in the way of a stereotype-laden cheap shot at "fat, lazy American[s]"?)
6.19.2007 1:42pm
Andy Freeman (mail):
> For example, just as you could move to somewhere within walking distance (or walking distance to public transportation) of work, shoppig, and other entertainment venues

Actually, I can't, as no such place exists. While some individuals could, many of them are part of a family unit where there's no single location that satisfies that constraint for all members.

It's okay with me if other people choose to live in a hive, but I don't see why we should tax other choices.
6.19.2007 1:42pm
KeithK (mail):
For those who think that this is ludicrous remember that you have to think about marginal changes. You might not change your behavior due to the rise in gas prices but there are some people who probably already have. Each uptick in prices probably makes a small sliver of people change their habits. These marginal changes can add up to significant changes in the aggregate.

I'm not saying that the study is correct or that the numbers are right (haven't read the paper). But it's an unreasonable hypothesis.
6.19.2007 1:46pm
Andy Freeman (mail):
> First, keep in mind that with a tax-and-return scheme, there are no extra taxes on an aggregate basis no matter what happens.

Tax and return schemes are aggregate neutral only in theory. In reality, govts, especially those seeking to affect behavior, succumb to the obvious temptation.

Moreover, "aggregate" isn't all that comforting to folks paying the subsidy to others.

Be honest - you want to tax other people's lifestyle choices. You want sinners to pay you.
6.19.2007 1:47pm
ATRGeek:
Andy,

As an aside, I actually use my gasoline-powered car quite a lot, so I may well be on the "sinner" side of this equation (although I wouldn't consider myself a "sinner" to the extent I was willing to pay the true costs of my gasoline consumption--see below).

In any event, it is certainly true that the whole idea of a tax-and-return scheme is to make certain "lifestyle choices" more expensive than they are now in order to give people a greater incentive not to make that choice. Whether we "should" being do that is a complicated question. But I would note that to the extent people who make the relevant choice are creating net negative externalities, this scheme could actually be moving toward, not away from, a fair choice as people are forced to internalize the true costs of their choice. Again, the idea would not be to "punish" them as "sinners", but rather to make them compensate others for these negative externalities.

To put the same point another way, arguably gasoline is heavily subsidized in various ways, and those subsidies are distorting consumer behavior in costly ways. Therefore, something like a tax-and-return scheme is actually just trying to offset the negative effects of these subsidies.

In short, therefore, I am fine with your decision (or your family's decision) not to live in a "hive". But I don't see why you should be sheltered from having to pay the true costs of your decision. In other words, you have no fundamental right to be able to make that decision regardless of its costs.
6.19.2007 2:11pm
Randy R. (mail):
" What about the traditional hominess of having your own mailbox? "

Fine -- But the Post Office says that they need to cut costs, and hand delivery to every home takes more time, and therefore personnel, than cluster boxes. Somethings gotta give.

"What about the old and infirm? Shall we sacrifice them on the altar of notionally being thin and exercised by adding useless inconvenience to our lives?"

Wake up. We already have sacrificed the old and infirm in the suburbs. There is no place for them, especially if they can't drive a car. The suburbs can only exist if you can drive a car -- if you can't, or can't affored one, well too bad for you.

We used to have places where the old and infirm could live fairly easily. They were called 'cities'. These mythic places once had public transportation so you didn't need a car to go everywhere, you could walk to stores for basic items, even prescriptions, and you knew your neighhbors. That way, if you needed something, like a lift downtown, or you ran out of milk, or you needed someone to watch the kids for an hour, you could ask them.

But today, as someone put it, why would we want such a life? Where you might actually act neighborly to the neighbors? That's just so commie-pinko.
6.19.2007 2:21pm
Randy R. (mail):
Actually, there was a study I recall that came out a few years ago. Suburbanites were, on average, much heavier than city dwellers.
6.19.2007 2:22pm
Aleks:
Re: I cannot ever remember adjusting my driving level on the basis of the price of gasoline. I

I am doing this, but by taking the train to work three days a week, and planning my errand-running more carefully. I am not walking or biking more because of the simple reality that there's almost no where convenient to walk or bike to where I live. And I suspect that's the case for many if not most people.
6.19.2007 2:47pm
Query (mail):
Hans Bader,

Some people do seem motivated by "stigma" and other negative feedback. But, many others do not find negative feedback to be motivating.

Perhaps you find negative feedback motivating. For example, if I said that your argument is stupid and that you are obviously a moron, this might motivate you to improve. But for other people, such negative feedback does not motivate them. If it does anything, it makes them not want to write.

Overall, I think there is a bit of hubris on your part thinking that we should make policy based on the supposedly beneficial effects of negative "social stigma" when such effects are far from universal. Just because negative feedback and social stigma works for you, this does not mean it works for most other people.

It would be interesting to have some empirical evidence on this matter. Do students who are learning write tend to thrive when "social stigma" is used and they are labeled "bad writers." Alternatively, do they tend to thrive when their writing is not judged harshly, but rather they are given positive encouragement and specific suggestions for improvement?

In all probability, their is no universal answer. Some people probably really are motivated by negative feedback. It creates in them a strong motivation to "prove others wrong." But others are probably more motivated by positive feedback. Thinking that they are very capable, but want to strive to be even more so.
6.19.2007 5:56pm
CrosbyBird:
There's something to be said about less overt feedback. I'm a big guy. I'm sure that medically I would be classified as obese.

10 years ago or so, I was one of the biggest people out there. I had a lot of trouble finding clothing, fitting into regular seats, etc. And that's maybe 20-30 pounds less than I weigh now. Over the years, I gained and lost weight steadily but I've dropped about 20 pounds in the last year.

But I have no problem finding clothes because there's a hundred big and talls. I'm rarely the largest person in the room. Usually there are not only men bigger than me, but women. I don't feel enormous like I did when I was younger, and it's not because I'm smaller, but because everyone else is getting bigger.

Glad I moved to a 3rd floor walkup. Hopefully it will help burn those calories.
6.19.2007 6:30pm
CrosbyBird:
What I mean to say is that seeing tons of people bigger than you makes it a lot easier to fool yourself into thinking you're not dangerously overweight. You say the pain in your knees and back is from "getting older" or that "you twisted something" instead of accepting the fact that your body is screaming at you that you're overburdening it.

But when you see a functional person walking around at least 100 pounds heavier than you are, there's less incentive to kill yourself to lose weight.
6.19.2007 6:33pm
whackjobbbb:
Bad writing may be something the writer's born with and may not be able to do much about, and it may have little or no effects on anybody else in any event.

On the other hand, being obese, apart from those with physical afflictions, is a choice, and most definitely has effects on everybody else (insurance pools, public transportation, driving up the cost of food, etc.).

And since it is a choice in many cases, a social stigma can most definitely influence that choice.
6.19.2007 6:36pm
ATRGeek:
whackjobbbb,

What is your basis for claiming that bad writing is not a choice, but obesity is?

I'd actually suggest they have a lot of similarities. The basic issue is that for some people, at least by the time they are adults, good writing does not take a great deal of effort (by good writing I just mean relatively clean, clear, and otherwise unobjectionable prose). For others, it is a constant struggle to write well by that definition, and it can become a constant source of frustration for these people that what is relatively effortless for some is so difficult for them.

I gather obesity is much the same sort of thing. For some, it is relatively easy to maintain a healthy weight. For others it is a constant struggle, and again they get frustrated at the difference in effort required (particularly once homeostatic mechanisms kick in and people start regaining weight even on a regimen that previously appeared to be working).

Given this setup, I think Query has a strong point. Negative feedback may eventually cause people who struggle with obesity to simply quit trying, particularly if that negative feedback occurs during a regaining period.
6.19.2007 7:05pm
whackjobbbb:

The basic issue is that for some people, at least by the time they are adults, good writing does not take a great deal of effort (by good writing I just mean relatively clean, clear, and otherwise unobjectionable prose). For others, it is a constant struggle to write well by that definition, and it can become a constant source of frustration for these people that what is relatively effortless for some is so difficult for them.


Precisely, writing is something that might be considered hard-wired into people. And applying a social stigma to that trait is simply inappropriate.



I gather obesity is much the same sort of thing.


Disagree. Excluding those with medical conditions, we can look to diet, and we'll have our reason for obesity. It's in the calories... and caloric intake is a choice. Not that making the proper choices is always an easy one... it often isn't... but that doesn't remove the fact that it's a choice.

I would agree that applying a social stigma to a single individual might be problematic, and could result in a negative response in an individualized case. But globally, across the length and breadth of our society, applying that social stigma as it applies to the choices people make would affect those choices, I don't think there's any question about that. As was mentioned above, that's what we've done with smoking.
6.19.2007 9:28pm
Andy Freeman (mail):
> To put the same point another way, arguably gasoline is heavily subsidized in various ways, and those subsidies are distorting consumer behavior in costly ways.

One can argue anything, but I've found that folks arguing that gasoline is subsidized seem to "forget" an interesting fraction of the paid-by-users expenses and the incurred benefits. (For example, society and individuals benefit when folks are less restricted by geography in their employment choices.)

It's nice to see that ATRGeek didn't bother to make the argument, but simply assumed the conclusion and ran with it.
6.19.2007 11:19pm
Andy Freeman (mail):
There's an interesting assumption wrt obesity. That assumption is that society has a legitimate interest in reducing the "costs". I don't think that it does.

The "obesity is a social problem" argument is basically "obese people don't live as long and aren't as productive". (The net medical costs are not that different - dying is expensive - but obese people incur them sooner. Note that the time value overstates the difference because they also don't live as long in retirement, so they're a net burden for less time, but I digress.)

It's not clear that society has a legit interest in interfering with choices that have those consequences. People don't owe "full productivity", they owe what they're paid for. Obese people make less. They'd rather be obese. If society doesn't like their choice, isn't society's only legit response to increase the benefit that they get from more productivity?

At this point, "but we're subsidizing their medical care" argument comes back. As I commented above, that's not a distinguishing characteristic, but even if it was, so what? We don't have to subsidize it. How does our decision to subsidize something turn into someone else's obligation to reduce the cost of said subsidy?
6.19.2007 11:30pm
Mark in Texas (mail):
Actually, there was a study I recall that came out a few years ago. Suburbanites were, on average, much heavier than city dwellers.

When I was young and single and lived in a city, I weighed less than I do today now that I am married with kids which is why I live in a suburb with good schools. I also get a lot less recreational exercise than I used to when I was young and single since a lot of my non work hours are committed to husband and parent type activities instead of working out at the gym, pick up ball games or riding my bike all day on weekends.
6.19.2007 11:37pm
ATRGeek:
whackjobbbb,

Bad writers can generally "choose" to work really, really hard and write better. It just doesn't come natural to them.

With respect to diet, eating a healthy diet is really, really hard for some people--again, it just doesn't come natural to them. Specifically, when they are constrained to a healthy diet, they feel terrible (they might feel depression, anxiety, or simply hungry all the time). And although they know the long term health consequences, and in fact they know being obese will subject them to social stigma (Hans is wrong, of course, to claim that this is somehow no longer true), they know the immediate cure for their terrible feelings is simply to break their diet. So eventually they do.

In the end, whether you want to call that decision to give in and cure their terrible feelings a simple matter of choice or not is just semantics. But we already know that social stigmatization isn't going to be effective in stopping such people from making that choice.

Andy,

I freely admit I merely sketched the argument about the externalities and subsidies associated with gasoline. To do a full analysis, we would need to assess the externalities, positive and negative, and all the relevant subsidies, and as I already noted that is a very complicated task. I don't think we can do that here in the comments section.

As for obesity: first, I haven't read the studies cited by the paper, but the claim seemed to be that obesity did in fact increase net medical costs. This makes intuitive sense to me because obesity can degrade health for long periods of time.

Second, society benefits from reducing health care costs regardless of who pays.

Third, you set up a dichotomy between our decision to cross-subsidize medical costs and their imposition of increased medical costs on this cross-subsidy system. But they are actually part of the we who made the collective decision to subsidize medical costs.

This is actually a basic moral hazard problem. When people get together and pool risks, as with health insurance, it then gives people an incentive to take on additional risks because they do not bear the full cost of such risks.
6.20.2007 12:06am
theobromophile (www):


This is actually a basic moral hazard problem. When people get together and pool risks, as with health insurance, it then gives people an incentive to take on additional risks because they do not bear the full cost of such risks.


So the politically incorrect question: why can't we increase the health insurance premiums of obese people to reflect their true medical costs? (There must be some point at which obese people are paying for themselves, and the slender for themselves.) It would eliminate the social need to pressure people to change their lifesytle, as they would cease being a net drain on the insurance industry.
6.20.2007 3:40am
ATRGeek:
theobromophile,

I'm not quite sure I understand the proposal: the future obese/slender are not necessarily identifiable in advance, and obviously there is a quite a line-drawing problem. But if this is not just going to be an outlawing of insurance payments for obesity-related health care costs, you would have to be able to identify the people in question in advance so you would know from whom to collect higher premiums. In other words, approaching this through premiums requires ex ante knowledge, and we really only have ex post knowledge. Finally, I'd also note that even if you could somehow divide the risk pool in advance, the moral hazard problem would remain in effect among the members of the high risk pool.

More fundamentally, though, from a social welfare perspective it again doesn't really matter who pays. The mere fact that people are paying more for health care reduces the net social welfare.

Consider, for example, the following hypothetical. Suppose a local government decided to change over its tap water system to a tap Coca-Cola system, including in public fountains and the like. Afterwards, the locality experiences an alarming increase in obesity rates attributable to people drinking this tap Coca-Cola, and health care costs start rising in the locality.

Now, the local government could try to address this problem by passing a local ordinance which allowed insurance companies to refuse payment for claims based on obesity-related diseases. Suppose they do that, and it has a marginal effect on obesity rates but they remain much higher than before the tap Coca-Cola plan went into effect.

I'd suggest the local government might strongly consider ending this tap Coca-Cola scheme, even though now the obese people have to pay for the resultant health care costs themselves. And again, while I acknowledge that we cannot prove this within the constraints of this discussion, I think there is a strong argument that our federal government is basically doing the same thing with gasoline (subsidizing it so that people are not facing the true costs at the pump).
6.20.2007 7:26am
Andy Freeman (mail):
> But if this is not just going to be an outlawing of insurance payments for obesity-related health care costs, you would have to be able to identify the people in question in advance so you would know from whom to collect higher premiums.

Huh? In this universe, the folks setting premiums have the opportunity to change premiums, almost at will. (Few bother, but ....)

The restrictions on risk-based pricing are entirely external to the health-insurance industry. If, as is assumed in this case (even though it isn't actually true), those restrictions impose costs, why shouldn't they be paid by those imposing them?

I note that the "let those who get the benefit" pay principal was assumed adequate when gas subsidies were at issue. Why is the decision to interfere in the health care market for the (supposed) benefit of obese people any different?
6.20.2007 10:23am
Andy Freeman (mail):
> Second, society benefits from reducing health care costs regardless of who pays.

Society would benefit from lots of things that it has no right to impose. Instead, it has to pay for them or do without, recognising that some folks won't take the money.

Yes, I realize that attempts to pay are often wasted because they get spent on the wrong folks. Think of those failures as nature's way of telling you the limits of the nanny state.

Frankly, I don't see why you care about obese people. Yes, they don't live as long and aren't as productive, but so what? They find obesity, or rather, the means by which they become obese, adequate compensation. (I'll get to the other reasons below.)

> Third, you set up a dichotomy between our decision to cross-subsidize medical costs and their imposition of increased medical costs on this cross-subsidy system. But they are actually part of the we who made the collective decision to subsidize medical costs.

ATRGeek used subsidies as justification, so why is it unreasonable to point out that the subsidy is optional? The claim that obese people demand subsidy, even if true, is irrelevant because they didn't make the call.

> When people get together and pool risks, as with health insurance, it then gives people an incentive to take on additional risks because they do not bear the full cost of such risks.

And that's still irrelevant because they lack the ability to force others to pay for those risks.
6.20.2007 10:41am
whackjobbbb:

Bad writers can generally "choose" to work really, really hard and write better. It just doesn't come natural to them.


Some can learn to write better, but everybody will reach a limit based on their natural ability, I'd say, and this limit doesn't exist by their own choice (it's unlike obesity, in this way). And remember, the "costs" of their bad-writing condition are not passed onto anybody else, as are the costs of obesity.







With respect to diet, eating a healthy diet is really, really hard for some people--again, it just doesn't come natural to them. Specifically, when they are constrained to a healthy diet, they feel terrible (they might feel depression, anxiety, or simply hungry all the time).


Agreed, making the proper choices is often difficult, and food withdrawal resembles drug withdrawal in many ways. Both are choices, however.







In the end, whether you want to call that decision to give in and cure their terrible feelings a simple matter of choice or not is just semantics. But we already know that social stigmatization isn't going to be effective in stopping such people from making that choice.


We do? Then how do you explain the decline in smoking rates?

I agree with Andy that we could at least begin to resolve some of this if the obese were required to pay for the full costs of their obesity, and the rest of us weren't subsidizing it (insurers/employers sometimes look to smoking as an indicator, as we know). And the social stigma attached to obesity need not be any more harsh than that attached to smoking... and would hopefully be at least as effective.
6.20.2007 11:37am
ATRGeek:
Andy,

First, what is the basis of your claim that obesity does not create a net increase in health care costs? I agree that is not automatically the case, but it is not implausible either, and that is apparently what the cited studies concluded (although as I noted before I haven't read them).

Second, as I noted, if an insurance provider can identify who bears the relevant risks in advance they can divide the pool and charge higher premiums to the more risky population in advance. But if you can only identify the high risk population after or only soon before they start making claims, then increasing their premiums from that point forward won't work (unless you are really just using those nominal "premiums" as a roundabout way of denying coverage).

Third, I don't deny that health insurance, or insurance of all kinds, gives rise to cross-subsidies. Sometimes subsidies are a good idea, and sometimes they are a bad idea (and as I have noted several times now, it will be complicated to figure out whether our subsidization of gasoline is a good or bad idea). With respect to insurance, often the resultant cross-subsidies are a good idea only if you institute some sort of protection against the moral hazard problem. That is often how the need to "interfere" with the behavior of others comes about: such "interference" may be necessary to preserve an otherwise beneficial insurance scheme.

Fourth, on a related point you again seem to be setting up a dichotomy between the group who sets up a cross-subsidy scheme and the members of the group who then end up being net beneficiaries. But to the extent obese people either signed up for private insurance or are members of a democratic society which set up a public insurance scheme, they "made the call" to create this system of cross-subsidies just like anyone else. Of course, it is true that they could not, acting alone, force others to provide the cross-subsidy. But once they have participated in a collective effort to create the system of cross-subsidies (private or public), they share the same responsibilities as anyone else in that position.

As a final note, I want to make clear that I raised the issue of moral hazards only to explain why members of a mutual insurance group might have a legitimate interest in the risk-creating behaviors of their fellow members. But I don't mean to suggest that there is an easy solution to this particular moral hazard problem. Indeed, what I find interesting about this study is that increased gas prices apparently address this issue in a pretty effective manner, which has generally not been true of efforts to deal with obesity. And as I have noted (but not proved), this might be just one of many positive externalities of higher gas prices.
6.20.2007 11:39am
Andy Freeman (mail):
> To do a full analysis, we would need to assess the externalities, positive and negative, and all the relevant subsidies, and as I already noted that is a very complicated task.

My point is that ATRGeek assumed the result that supported his desired conclusion.

I'm opposed to subsidies, but I believe that it's important to not use said opposition as a pretext for other causes, as I believe to be the case here.

> I'd suggest the local government might strongly consider ending this tap Coca-Cola scheme, even though now the obese people have to pay for the resultant health care costs themselves. And again, while I acknowledge that we cannot prove this within the constraints of this discussion, I think there is a strong argument that our federal government is basically doing the same thing with gasoline (subsidizing it so that people are not facing the true costs at the pump).

That's all well and good, but it argues against the proposed measure and argues for looking at the supposed subsidies and eliminating them.

That argument will, of course, end up considering whether those measures actually are subsidies or are actually are reasonable ways to spread the costs across the beneficiaries. I'll bet that some of them are actually aggregate neutral, a property that ATRGeek has previously found virtuous.

Note
6.20.2007 11:48am
Andy Freeman (mail):
> For example, a $1/gallon tax which was then immediately returned to taxpayers on a per capita basis might capture the health benefits without imposing a net tax cost

It must be nice to live in a world with no transaction costs.

However, I'm interested in the assumption that 0 net tax cost is a good thing. Is 0 the global maximum for benefits or would we be better off with a program that increased tax revenues? How about one that decreased them?

Or, was the 0 net tax thing an irrelevant detail intended to distract?
6.20.2007 11:52am
CrosbyBird:
Then how do you explain the decline in smoking rates?

It's a lot harder to find a place where you can legally smoke.

Thirty years ago, people were smoking in the office, at a movie theater, in an airplane, in a restaurant, in a bar. All of these places are off-limits now.

For most regular smokers, there's simply not as many hours in the day where you can smoke, and finding places is a nuisance. When you have to take a trip down the elevator, and then stand outside in the cold and rain in a huddled mass of fellow smokers, it's some serious negative feedback for smoking.
6.20.2007 12:13pm
ATRGeek:
Andy,

I think if you go back and look at what I wrote from the beginning, it is actually clear that I did not assume the answers to your descriptive questions about subsidies and externalities (I just pointed out what could be true, and some of the implications if those things were true). Frankly, I think this has been clear from the beginning, and in any event I have since made it clear on many more occasions.

As for a tax-and-return system: first, I agree that as always, transaction costs will be a component of the costs of such a scheme. Again, I think you will find that I did not in fact argue that a tax-and-return system would be entirely costless.

Second, a zero net tax cost is neither a good thing nor a bad thing. Of course, you might recall that the potential good thing we have been discussing was a net reduction in health care costs that might result from higher gasoline prices. You might also recall that my original point when I raised the possibility of a tax-and-return scheme was just that the author assumed for the sake of analysis that the $1/gallon price increase would be a $1/gallon cost to social welfare, and that is not necessarily the case depending on what is happening to that $1/gallon.

Again, I think this has all been clear from the beginning, and it seems to me that you are confusing the issue by misconstruing what I have written (intentionally or unintentionally). I suspect that is because of your implied conviction that somehow I don't really believe anything that I am suggesting in these discussions, and instead that I am just using these arguments as "a pretext for other causes."

I actually have no idea what you mean (eg, I have no idea what "other causes" you think I am secretly serving), but the bottomline is that I don't see much point in continuing this discussion if you believe that I do not mean what I am actually saying and instead have some hidden agenda. Indeed, I am not sure I understand why you would be interested in such a discussion.
6.20.2007 12:38pm
ATRGeek:
CrosbyBird,

It is also possible that clamping down on deliberate efforts to market smoking to children has had a positive effect. As the cigarette companies' internal documents make quite clear, they need to market to children because people who start smoking as adults become addicted to smoking at a much lower rate.
6.20.2007 12:42pm
whackjobbbb:
Exactly. In all the ways you both mention, the social stigmas against smoking work, and modify the choices made, and obesity is no different... it's a choice.
6.20.2007 2:07pm
ATRGeek:
whackjobbbb,

Well, to the extent we can say that people who became addicted to smoking as children are choosing to smoke as adults, sure, it is a choice.

But again, that is just semantics. The real issue is that applying social stigma at that point (once they are addicted adults) makes only a marginal difference in their behavior.

By the way, what stopped the companies from marketing to children was a consent decree, not the application of social pressure. See here:

Tobacco Master Agreement Summary
6.20.2007 2:52pm
theobromophile (www):

Second, as I noted, if an insurance provider can identify who bears the relevant risks in advance they can divide the pool and charge higher premiums to the more risky population in advance. But if you can only identify the high risk population after or only soon before they start making claims, then increasing their premiums from that point forward won't work (unless you are really just using those nominal "premiums" as a roundabout way of denying coverage).


Unless I'm losing you, you're arguing that it makes sense to charge higher premiums to the obese (assuming that they do in fact incur more health costs), much in the same way that young men pay more in car insurance. You are just arguing that it is impractical...?

If you want life insurance, you might have to submit to a small physical that will determine whether or not your are eligible and what your rates will be. (Assume that this is merely for the subject of rates, not eligibility.) Health insurance already depends on age. Why not ask people to submit to a quick physical or send the results of their most recent physical? Insurance companies could use a combination of blood pressure, height, weight, and percentage of body fat to recalculate premiums.

Given that many of the diseases associated with obesity (type II diabetes, joint pain, sleep apnea) will be treated long before cardiovascular failure or cancer - the latter two being the really expensive ones.

Of course, the costs of the physicals and of adjusting premiums accordingly could exceed the extra cost that obese people add to the system, but that is not a quantitative, not a philosophical, question.


But I don't mean to suggest that there is an easy solution to this particular moral hazard problem. Indeed, what I find interesting about this study is that increased gas prices apparently address this issue in a pretty effective manner,


Not really. Reducing the moral hazard via higher gas prices is both over-inclusive and under-inclusive. New Yorkers, as I recall, have some of the highest heart attack rates per capita and are more obese than you would expect city dwellers to be. Yet, higher gas prices will hardly affect them. High gas prices harm the physically fit who are not a large drain on our health care system.

The cost of petroleum is only loosely correlated with the moral hazard in question. Why use that mechanism?
6.20.2007 9:13pm
Andy Freeman (mail):
> First, what is the basis of your claim that obesity does not create a net increase in health care costs?

I didn't say that there wasn't an increase, I said that one of the stated increases (reduced life span) wasn't an increase so much as a time-shift. Even that overstates the impact as people who live longer have health care costs over a longer period of time.

> Second, as I noted, if an insurance provider can identify who bears the relevant risks in advance they can divide the pool and charge higher premiums to the more risky population in advance. But if you can only identify the high risk population after or only soon before they start making claims,

True but irrelevant. It's easy to identify someone who has become obese, before the risk changes substantially.

> Third, I don't deny that health insurance, or insurance of all kinds, gives rise to cross-subsidies. Sometimes subsidies are a good idea,

ATRGeek is still dodging the question of how a decision to offer a subsidy becomes an obligation to reduce the cost of said subsidy.

> and sometimes they are a bad idea (and as I have noted several times now, it will be complicated to figure out whether our subsidization of gasoline is a good or bad idea).

If a subsidy is a bad idea, eliminate it. That argument is far more likely to consider the actual costs and benefits than an argument about some other transfer.

> With respect to insurance, often the resultant cross-subsidies are a good idea only if you institute some sort of protection against the moral hazard problem.

How about insurance schemes that are subject to the moral hazard reach too far? An insurance scheme that makes self-injury profitable is an example.

I've no objection to ATRGeek participating in such a scheme. Does he object to my participation in schemes that don't have that property?

> But once they have participated in a collective effort to create the system of cross-subsidies (private or public), they share the same responsibilities as anyone else in that position.

They share, but they weren't decisive, and the same decision would have been reached without their participation.
6.21.2007 1:37am
Andy Freeman (mail):
> I suspect that is because of your implied conviction that somehow I don't really believe anything that I am suggesting in these discussions, and instead that I am just using these arguments as "a pretext for other causes."

Huh? I'm quite certain that ATRGeek believes what he writes. The only "pretext" that I've mentioned is an assumed gas subsidy to justify a gas tax that he openly supports.
6.21.2007 1:43am
Andy Freeman (mail):
> I agree with Andy that we could at least begin to resolve some of this if the obese were required to pay for the full costs of their obesity, and the rest of us weren't subsidizing it

That wouldn't satisfy the do-gooders.

The subsidy (if any), is not inherent.

As I wrote, I've no objection to ATRGeek choosing a system that has such subsidies. I'd like to choose a different system.

And, I'm even willing to let him call me names for making that choice.
6.21.2007 1:49am
whackjobbbb:

But again, that is just semantics. The real issue is that applying social stigma at that point (once they are addicted adults) makes only a marginal difference in their behavior.


It's not "semantics", the analogy between smoking, drug use and food intake as it applies to obesity is very real. And applying the social stigma has worked on the first 2, and can work for the last then, if allowed to be used.

By the way, the "marginal difference" re adults, as related to smoking, includes me and many others, and statistics prove this out as we see in smoking statistics.

Do you not recognize the analagous relationship between these 3 activities?
6.21.2007 3:47pm