DigitalCommons@Linfield

The Obesity of Economics: An Application of the Law of Demand to Obesity Prevalence within the United States

Jereld R. Nicholson Library

We estimate the demand function for obesity using a panel model across fifty-one U.S. states over the years 2000 to 2010. We study the impact of educational attainment, average commute time to work, relative price, per capita income, and the state unemployment rate on obesity levels, controlling for differences in regional culture. We find that since 2001, obesity is a function of the relative prices of healthy and non-healthy foods across regions, as well as state per capita income and educational attainment. From 2005 to 2010, we find that average commute time to work is a significant factor in the state obesity rate as well. Our results indicate that obesity is an inferior good due to its negative relationship with per capita income. In addition, we find obesity to be very inelastic to changes in the relative price of healthy and non-healthy food over both time periods. For every one percentage increase in the relative price of healthy food, the obesity rate increased by only 0.062 percent. Our findings suggest that in order to most effectively reduce the state obesity rate, public policies should focus on increasing educational attainment rather than lowering the relative price of healthy food. We find regional culture to be the largest indicator of state obesity rate. This suggests that, regardless of the price of food, some people will choose to adopt an unhealthy lifestyle as a result of cultural influence.