Public Policy Discussion Paper No. 06-5
by Mary Burke and Frank Heiland

In order to explain the substantial recent increases in obesity rates in the United States, we consider the effect of falling food prices in the context of a model involving endogenous body weight norms and an explicit, empirically grounded description of human metabolism. Unlike previous representative agent models of price-induced gains in average weight, our model, by including metabolic heterogeneity, is able to capture changes in additional features of the distribution, such as the dramatic growth in upper-quartile weights that are not readily inferred from the representative agent setting. We calibrate an analytical choice model to American women in the 30-to-60-year-old age bracket and compare the model’s equilibrium weight distributions to data from NHANES surveys spanning (intermittently) the period from 1976 through 2000. The model predicts increases in average weight and obesity rates with considerable accuracy and captures a considerable portion of the relative growth in upperquantile weights. The differential response to price declines across the distribution depends on the fact that human basal metabolism (or resting calorie expenditure) is increasing and yet concave in body weight, and therefore food price effects on weight tend to be larger for individuals who are heavier initially. The lagged adjustment of weight norms helps to explain recent observations that obesity rates have continued to rise since the mid 1990s, despite an apparent leveling off of price declines. The predicted increase in body weight aspirations agrees with an observed trend in self-reported desired weights, and it defies the conventional wisdom that thinness has been a growing obsession among American women in recent decades.

JEL classification codes: D11, I12, Z13

Full-text paper