Obesity And, Our Economy
Jason Kerr
Palm Beach State College
Macroeconomics
Professor Magill
July 10th, 2017
How Obesity Affects Our Economy
Over the past several decades, obesity has grown into a major global epidemic. By 2002,
nearly 500 million people were overweight worldwide. In the United States (US), rates of obesity
have doubled since 1970 to over 30%, with more than two-thirds of Americans now overweight.
The determinants of this epidemic are likely complex with substantial heterogeneity at the
individual level in both causes and consequences that is beyond the scope of the current review.
In this paper, I provide an overview of the state of research on the likely economic impact
of the US obesity epidemic at the aggregate level. I conducted a broad search of the literature
that addresses potential economic costs of obesity. The most recent studies that sample US
populations have identified at least four major categories of economic impact linked with the
obesity epidemic: direct medical costs, productivity costs, transportation costs, and human
capital costs. I systematically review current evidence on each set of costs in turn, and discuss
important gaps for future research along with potential trends in future economic impacts of
obesity. This review adds to the current research on the economic impact of obesity by providing
a more comprehensive overview of the range of effects, as well as a summary of the most up-to–
date estimates.
One of the most cited economic impacts of the obesity epidemic is on direct medical spending.
Obesity is linked with higher risk for several serious health conditions, such as hypertension, type 2
diabetes, hypercholesterolemia, coronary heart disease (CHD), stroke, asthma, and arthritis. Direct
medical spending on diagnosis and treatment of these conditions, therefore, is likely to increase with
rising obesity levels. Several studies offer retrospective or prospective estimates of the degree of
disease incidence that can be linked to obesity, and of the magnitude of associated direct medical costs.
The most common definitions of obesity are based on body mass index (BMI), defined as
weight in kilograms divided by height in meters squared. Obesity in adults is generally defined
as a BMI of 30.0 or greater, with BMI of 25.0–29.9 categorized as overweight.
Thompson et al present a dynamic model of the relationships between BMI and the risks
of five diseases linked with obesity: hypertension, hypercholesterolemia, type 2 diabetes
mellitus, CHD, and stroke. The model captures both direct and indirect effects of obesity on
health outcomes – obesity is a risk factor for hypertension, hypercholesterolemia, and diabetes,
which are themselves risk factors for CHD and stroke. Estimated using a variety of data sources
(including the National Health And Nutritional Examination Survey or NHANES, and the
Framingham Study), the model gives future risks of all five diseases, life expectancy, and
lifetime medical costs associated with the five diseases for men and women aged 35 to 64 years
in each of four representative BMI groups (“healthy” BMI of 22.5, “overweight” BMI of 27.5,
“obese” BMI of 32.5, and “severely obese” BMI of 37.5). BMI is assumed to be constant at its
initial value for all individuals, with other risk factors adjusted for each year of aging. Results
from the model demonstrate substantial increases in disease risk with increasing BMI. Relative
to the group with BMI of 22.5, risk of hypertension is 40%–60% higher in the overweight (BMI
27.5), and twofold higher in the obese (BMI 32.5). Lifetime risk of CHD is 41.8% in obese men
compared to 34.9% in the nonobese; for women, risk increases from 25% for the nonobese to
32.4% for the obese.
Similar relative disease risk rates for the overweight and obese are found in large-scale
population studies. The Health Professionals Follow-up Study, based on 29,000 men observed
over a three-year time–period, found CHD risk to be 50% higher in the overweight (BMI 25–
28.9), twice as high in the obese (BMI 29–32.9), and three times as high in the severely obese
(BMI > 33), compared to healthy weight men (BMI < 23). For women, analysis based on the
Nurses’ Health Study found the relative risk of type 2 diabetes to be 40.3 for women with BMIs
between 31 and 32.9 (compared to those with BMI of less than 22). Analysis of NHANES-II
cross-sectional data for both men and women found risk of hypertension and diabetes to be
increased 3.0 times and 2.9 times, respectively, compared to the nonoverweight. A large-scale
telephone survey of 195,000 adults found the odds ratio for the overweight and obese (compared
