Wednesday, September 12, 2007

Would Higher Gasoline Prices Help Us Lose Weight?

In the spring of 2006, I came close to signing on as a faculty member of Washington University at St. Louis. Thus, I could have been a member of this student's PHD committee. So, permit me to offer him some comments.

His causal story is pretty clear. If gas prices were $5 a gallon, we would walk to the local store and walk to the bus or metro stop rather than driving everywhere. Extra exercise would burn more calories and we would get thin.

Charles Courtemanche estimates an enormous effect. If this was reported correctly, an increase in U.S gas prices to equal Italy's would help us to shrink by 30% in weight!

I have some questions for Charles;

1. Given that most poor people don't have cars and that poor people are gaining the most weight, how does his theory explain this fact?

2. Can he test for heterogeneous treatment effects? For example, do young people (age 20-30) lose the most weight when the price of gasoline goes up?

3. Glaeser, Shapiro and Cutler have argued that "easier access" to calories such as 7-11 stores and french fries is why we are gaining weight. They argue that the time price of accessing such tasty fattening calories has fallen over time. One complementary story that would meld Charles' work with the Glaeser et. al. work is that people make fewer "fun" trips to fast food stops when the price of gas is higher. Is this correct?

weight gain = intake - calories burned off

my point is that the rising price of gas could reduce intake as well as increase the burn off and I'd like to see both quantified.

4. Is Charles sure that people exercise more when the price of gasoline is higher? This would require time diaries and micro data to test this interesting claim?

5. Has he explored cross-country data; consider a simple regression of;

BMI in nation j = constant + b1*% smoke + b2*Price of gasoline + U

is b2<0?

6. To Charles' credit, this is a nice question and not all young economists have their work written up in Yahoo!

Higher gasoline price seen trimming down Americans

Tue Sep 11, 4:43 PM ET

Higher U.S. gasoline prices may slim more than just wallets, according to a new study from Washington University in St. Louis.

Entitled "A Silver Lining? The Connection between Gas Prices and Obesity," the study found that an additional $1 per gallon in real gasoline prices would reduce U.S. obesity by 15 percent after five years.

The report, written by Charles Courtemanche for his doctoral dissertation in health economics, found that the 13 percent rise in obesity between 1979 and 2004 can be attributed to falling pump prices.

Gasoline hit a low of less than $1.50 per gallon in 2000 before moving back to a record high of $3.22 in May 2007.

Higher gasoline prices can reduce obesity by leading people to walk or cycle instead of drive and eat leaner at home instead of rich food at restaurants.

Courtemanche said he became interested in the link after rising gasoline prices made him think about eschewing his car for public transport.

"I was pumping gas one day, thinking with gas prices so high I may have to take the Metro," he said, referring to the public transportation system serving the St. Louis area.

Courtemanche said he figured he would get an extra 30 minutes of exercise per day by walking to and from the Metro station.

Obesity, defined as having a body mass index greater than 30, has been considered to factor in as many as 112,000 deaths annually.

U.S. health costs related to obesity are estimated at $117 billion per year as studies sponsored by the U.S. government have linked it with high blood pressure, diabetes, heart disease and stroke.