Economics of Obesity

Abstract

There has been a significant growth in obesity over the last several years which has been a major epidemic in which more than half of Americans are considered overweight and shockingly 1/3 of the population is shockingly considered obese.  Research supports that there is a major economic impact that is associated with the rise of the epidemic of obesity.  Medical costs, loss of work, wages and insurance are all key factors which contribute to the direct and indirect costs behind obesity.  I will cover the most prevalent information as it pertains to the costs and identify challenges and potentials in regards to the research trends and the impact of obesity.  The potential economic impact will be provided and seek to explore potential future research opportunities.

In addition it has been shown that there is a correlation to high rate obesity and low income groups in America.  With the increase of fast food restaurants competing against each other and their accessibility coupled with their inexpensive menu options has created an increase in weight for Americans in dangerous proportions.  Foods that are nutrient filled such as vegetables and fish have a much high cost and are less convenient to most.  The refined sugars and grains along with the high fat content and fillers that most of these foods are laden with have caused an addiction and craving for these foods.  Because of the small national value there are many who tend to eat more of this type of food from a purely addictive standpoint.  There are even many fast food restaurants who now accept EBT cards which at one time was only to purchase certain types of foods from the grocery store.

The costs of diets that are lower in nutritional value in comparison to those of high nutritional value will also be explored from an economic view.

Direct Medical Costs

Direct medical costs associated with obesity are the easiest and most prevalent of impacts based on medical expense.  The link between obesity and the risks of dire health symptoms are clear.  High blood pressure, heart disease, diabetes, asthma, strokes and high cholesterol are all symptoms exacerbated by being afflicted with obesity.  Those who have a body mass index (BMI) of 30 or greater are considered obese while those in the 25 -29 range are categorized as overweight.  As noted within The National Bureau of Economic Research, “One important potential consequence of obesity is higher medical care costs. Fat releases hormones that lead to insulin resistance and damage the cardiovascular system, with the result that obesity is associated with a wide variety of health conditions such as diabetes, heart disease, and cancer. Previous studies estimated the correlation of obesity with medical care costs, which is difficult to interpret because weight may be correlated with important unobserved factors (such as socioeconomic status) and there may be reverse causality (an expensive back injury may lead to weight gain).” (Cawley, 2013)

Indirect Costs

The medical costs associated with obesity associated diseases include both the treatment and diagnosis for the medical conditions.  Studies suggest that these cost can become substantial.  The comparison between the medical costs associated those who are at an ideal BMI in comparison to those considered overweight suggest that there is a 50% increase in medical costs over the person’s lifetime.  Those who are severely or morbidly obese carry an even higher costs in some case double the amount.  Costs based on insurance, prescriptions, managed healthcare and hospital care are all factors in the overall bottom line in the realm of healthcare.  Adults and children who are obese are both groups that are a factor in the costs associated with health as there has been a dramatic increase in the cases of childhood obesity in the United States.  The economic burdens that are correlated to the future of healthcare based on the increase national trend is staggering.  Even with advances in technology these are all costs that will affect the direct costs associated with obesity.

Productivity Costs

As more are affected by the effects of obesity the result has affected the productivity of individuals in work place.  Those who are unhealthy tend to have more absenteeism and even when present tend to work in a less than productive manner based on limited capabilities.  Some companies will help to accommodate those who are obese by providing specially designed work station or seating which is an additional cost to a company’s budget for ergonomically accessible work environments.   In addition loss of concentration, fatigue and lack of focus also have been attributed to high obesity.  Many with severe weight issues suffer from Sleep Apnea which is a condition that affects the sleep patterns of those afflicted.  A person affected with this will cease breathing at night and often wake up repeatedly during the night.  The result is that the individual never fully gets to the crucial REM sleep pattern and will often cause an individual to lose focus and often go to sleep unexpectedly during the day.