This paper by the National Bureau of Economic Research is the first to estimate the impact of obesity on medical costs in order to address the endogeneity of weight and to reduce the bias from reporting error in weight.
- The report shows that nearly 17 percent of medical costs in the United States, or $168 billion, can be attributed to obesity. This is nearly twice the amount previously estimated.
- The study also concluded that obesity adds more than $2,800 to an individual’s annual medical costs.
- The results imply that the previous literature has underestimated the medical costs of obesity, resulting in underestimates of the cost effectiveness of anti-obesity interventions and the economic rationale for government intervention to reduce obesity-related externalities.
Cawley, John and Meyerhoefer, Chad. “The Medical Care Costs of Obesity: An Instrumental Variables Approach.” National Bureau of Economic Research. Working Paper No. 16467 (2010).