Does Health Insurance Make You Fat?

Edited by Jay Bhattacharya, M. Kate Bundorf, Noemi Pace and Neeraj Sood

in Economic Aspects of Obesity

Published by University of Chicago Press

Published in print May 2011 | ISBN: 9780226310091
Published online February 2013 | e-ISBN: 9780226310107 | DOI:
Does Health Insurance Make You Fat?

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This chapter describes the negative obesity externality associated with health insurance. The measurement of the obesity externality involves more than just measuring the subsidy to obese individuals induced by health insurance. The welfare loss due to the obesity externality depends upon both the size of the subsidy and upon the extent to which body weight decisions are distorted on the margin by the subsidy. The main mechanism by which obesity imposes external costs is stated to be through pooled health insurance. It discusses the importance of health insurance elasticity of body weight to the welfare economics of obesity and measures separate elasticities for the extensive margin (people gaining or losing insurance altogether) and the intensive margin (insurance becoming more generous). It further distinguishes different elasticities for public and private insurance coverage for estimates of the elasticity along the extensive margin.

Keywords: obesity; health insurance; externalities; welfare economics; external costs

Chapter.  11519 words.  Illustrated.

Subjects: Economics

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