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Abstract:

Over the past several decades, obesity has grown into a major global epidemic. Obesity in the United States is widely acknowledged to be a severe and growing problem. In the United States (U.S.), more than two-thirds of adults are now overweight and one-third of the overweight population is obese. There is growing evidence that obesity in America is largely an economic issue. In this paper, we will provide an overview and an economic analysis of obesity based on behavioral economics as a non-rational behavior. Economic costs of obesity are discussed with an emphasis on healthcare costs, as obesity is perhaps the largest medical problem in America. Research to date has identified at least four major categories of economic impacts linked with the obesity epidemic: direct medical costs, productivity costs, transportation costs, and human capital costs. Stemming the obesity epidemic cannot be separated from stemming the tide of poverty and income inequality gap. Some expert arguing that income inequality is the major cause of our nation’s health problems. In this paper, panel-cointegration test was used using data from 1998-2002 and our result rejected the null-hypothesis of “no coinegration, which indicates there is a cointegration exists among obesity, inequality and poverty. Thus improving health depends upon transforming economic conditions. Other contributing factors include; rising fast-food outlets and availability of vending machines, too much advertising for unhealthy food, the falling value of minimum wage, government subsidies, income inequality gap, and lack of health and family benefits. These issues need to be addressed through a concerted program of environmental and policy interventions.

KEYWORDS: obesity, medical costs, economics, cointegration, inequality gap, poverty, food prices, diet cost

 

obesity, medical costs, economics, cointegration, inequality gap, poverty, food prices, diet cost