Cross sectional analysis finds that individuals with lower income are more likely to be overweight or obese. Does this imply that increased income causes weight loss?
A paper by Au and Johnston (2015) find the opposite result.
In this paper, we use nationally representative panel data and exogenous wealth shocks (primarily inheritances and lottery wins) to shed light on this issue. Our estimates show that wealth improvements increase weight for women, but not men. This effect differs by initial wealth and weight—an average-sized wealth shock received by initially poor and obese women is estimated to increase weight by almost 10 lb.
Why are poor people likely to be overweight but the authors find that increased income causes weight gain?
I have two explanations. First, although the wealth shocks the authors identify are generally exogenous, they may have an adverse affect on activity or diet. Inheritances or lottery wins increase the likelihood of removing oneself from the labor force, which may have adverse effects on diet and exercise. A change in income (e.g., a 10% raise) would likely not have a similar effect; since it is a flow rather than a stock payment, pay raises are only realizable if one does not remove oneself form the labor force.
Second, weight is likely affected by one’s peers. Previous studies have shown that your peer’s weight affects your weight. Higher income households may have more social pressure to maintain their weight than lower income household. This is a statement about our current time and place as in other cultures or time periods wealthy households may value overweight individuals more. Inheritances or lottery wins do improve income, but likely have a smaller effect on one’s peers. Inheritances in particular are likely to be received by older individuals who are less likely to change their peer group.
Thus, I agree with the authors that the marginal effect of income on weight is positive, but the driving force of an individual’s weight—besides genetic factors—is likely the preferences of their peers.