Working Paper: NBER ID: w23682
Authors: Adam I. Biener; John Cawley; Chad Meyerhoefer
Abstract: This paper is the first to use the method of instrumental variables to estimate the causal impact of youth obesity on U.S. medical care costs. We examine data from the Medical Expenditure Panel Survey for 2001-2013 and instrument for child BMI using the BMI of the child’s biological mother. IV estimates indicate that obesity raises annual medical care costs by $1,354 (in 2013 dollars) or 159%, which is considerably higher than previous estimates of the association of youth obesity with medical costs; thus, the cost-effectiveness of anti-obesity interventions have likely been underestimated. The costs of youth obesity are borne almost entirely by third party-payers, which is consistent with substantial externalities of youth obesity, which in turn represents an economic rationale for government intervention.
Keywords: youth obesity; medical care costs; instrumental variables; BMI; health economics
JEL Codes: D62; I1; I14; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| youth obesity (J13) | medical care costs (I11) |
| BMI (I12) | medical care costs (I11) |
| severe obesity (I12) | medical care costs (I11) |
| BMI Z-scores above 90th percentile (I10) | medical care costs (I11) |
| youth obesity (J13) | externalities in medical costs (D62) |