School of Business
Many economists share the view that the rise in obesity is largely the result of rational decision-making by individuals who compare risks and benefits. A dominant view among economists is that there is no economic justification for government intervention unless there is a market failure. However, recent developments in behavioral economics suggests that people often fail to make optimal decisions, and that public welfare may be improved by government interventions even when there is no externality. This paper examines the association between one’s body weight and life satisfaction by utilizing data on self-reported life satisfaction, which approximates individual utility, after briefly reviewing the economics of obesity and discussing the rationale and justification of obesity-related policies. Using a large data set (N = 1,465,219), it is found that life satisfaction of people who are overweight or obese is lower. The adverse life satisfaction effect of obesity remains statistically significant, even when socioeconomic factors and obesity-related health variables are controlled. The findings suggest that many overweight and obese people may be making sub-optimal decisions when it comes to eating. While the findings are not causal and thus do not necessarily suggest that government intervention will be welfare-enhancing even in the absence of negative externalities, effective anti-obesity policies may lead to higher life satisfaction among many overweight people who are struggling with self-control problems.
Kuroki, Masanori, "Life Satisfaction, Overweight and Obesity" (2016). Faculty Publications -School of Business. 132.