Jay Bhattacharya

Welfare-Enhancing Technological Change and the Growth of Obesity

There has been concern about the dramatic growth in obesity seen in developed countries. This paper advances the view that a neoclassical interpretation of weight growth that relies on changing incentives does surprisingly well in explaining the observed trends, without resorting to psychological, genetic, or addictive models. Although the recent rise in obesity has attracted attention, weight growth is not a recent phenomenon (Dora Costa and Richard Steckel, 1995). Weight has been rising consistently over the past 150 years, particularly during the immediate post-World War II period. As Figure 1 illustrates, the secular growth in weight has been accompanied by modest growth, or even declines, in calorie intake (Judith Jones Putnam and Jane E. Allshouse, 1999). This suggests the importance of both rising food intake and declining physical activity. The calorie and weight trends have coincided with a decline in the relative price of food, of around 0.2 percentage points annually, from 1950 to 2000 (Lakdawalla and Philipson, 2002). To explain these trends, this paper argues that welfare-improving technological change has simultaneously lowered the cost of calories and raised the cost of physical activity by making agricultural production more efficient and work more sedentary. When home or market production involves manual labor, the worker is paid to exercise; in advanced economies, people pay to exercise, primarily in terms of forgone leisure. Leisure-time exercise, such as jogging or gym activities, must be substituted for jobbased exercise. Technological change on both the supply side (through agricultural innovation) and the demand side (through more sedentary household and market work) lead to weight growth, falling relative food prices, but ambiguous food consumption trends, because both food supply and demand fall. Welfare-enhancing technological change also has new implications for the effect of income on weight. Growth in earned income that results from more skilled, sedentary work raises weight, even though growth in unearned income might raise the demand for thinness. This helps explain why richer people are thinner than poorer people within countries where workplace technologies are more uniform, even though richer and more technologically advanced countries are fatter than poorer ones. This theory also produces different implications for price than its competitors, such as a change in the psychology of food consumption, growth in the demand for fast food, genetically induced eating, or changing social norms. These alternatives emphasize rising demand for food, which implies rising food prices. We develop the implications of the idea that economic progress (as income growth, food price declines, and sedentary work) leads to weight gain when people behave efficiently. To make concrete the point that obesity is a side effect of progress, we offer an empirical example of how lower food prices (a result of technological change) improve nutrition. Objective blood-test-based data suggest that lower food prices correlate with markedly improved nutrition in the United States. This relationship is often expected for developing countries, but less so for developed ones. Our results suggest the difficulty of improving welfare by “rolling back” obesity to earlier levels, because obesity is a side effect of welfareenhancing progress. The case of food prices and nutrition bears this out: raising food prices through taxation may reduce weight (cf. Marion * Lakdawalla: RAND Corporation, Santa Monica, CA 90407; Philipson: Harris School of Public Policy, University of Chicago, Chicago, IL 60637; Bhattacharya: CHP/ PCOR, Stanford University, Stanford, CA 94305. Lakdawalla thanks NIA for support (P30AG024968-01). 1 See Philipson and Richard Posner (1999) and Lakdawalla and Philipson (2002) for elaboration of the discussion here.

The incidence of the healthcare costs of obesity

Who pays the healthcare costs associated with obesity? Among workers, this is largely a question of the incidence of the costs of employer-sponsored coverage. Using data from the National Longitudinal Survey of Youth and the Medical Expenditure Panel Survey, we find that the incremental healthcare costs associated with obesity are passed on to obese workers with employer-sponsored health insurance in the form of lower cash wages. Obese workers without employer-sponsored insurance do not have a wage offset relative to their non-obese counterparts. A substantial part of the lower wages among obese women attributed to labor market discrimination can be explained by their higher health insurance premiums.

Cost implications of reduced work hours and workloads for resident physicians.

BACKGROUND Although the Accreditation Council for Graduate Medical Education (ACGME) limits the work hours of residents, concerns about fatigue persist. A new Institute of Medicine (IOM) report recommends, among other changes, improved adherence to the 2003 ACGME limits, naps during extended shifts, a 16-hour limit for shifts without naps, and reduced workloads. METHODS We used published data to estimate labor costs associated with transferring excess work from residents to substitute providers, and we examined the effects of our assumptions in sensitivity analyses. Next, using a probability model to represent labor costs as well as mortality and costs associated with preventable adverse events, we determined the net costs to major teaching hospitals and cost-effectiveness across a range of hypothetical changes in the rate of preventable adverse events. RESULTS Annual labor costs from implementing the IOM recommendations were estimated to be

HIV Development Assistance and Adult Mortality in Africa

1.6 billion (in 2006 U.S. dollars) across all ACGME-accredited programs (

Health Insurance and the Obesity Externality

1.1 billion to

Heterogeneity in Healthy Aging

2.5 billion in sensitivity analyses). From a 10% decrease to a 10% increase in preventable adverse events, net costs per admission ranged from

Chronic Disease and Severe Disability Among Working-age Populations

99 to

Physician Visits and 30-Day Hospital Readmissions in Patients Receiving Hemodialysis

183 for major teaching hospitals and from

AIDS and declining support for dependent elderly people in Africa: retrospective analysis using demographic and health surveys

17 to

Diabetes, Its Treatment, and Catastrophic Medical Spending in 35 Developing Countries

266 for society. With 2.5% to 11.3% decreases in preventable adverse events, costs to society per averted death ranged from