The cost of being obese

When we talk about the cost of being obese, many people will imagine the personal spending due to obesity, e.g. special clothing, housing, and transportation that may be different from the requirements of non-obese people, or even the medical expenses arising from obesity-related illnesses. Some people may also consider the cost of becoming obese, such as excessive consumption of high-calorie foods and sweetened beverages. A few more people may even take into account non-financial costs, such as suffering from discrimination and the social stigma attached to obesity. But economists take a different perspective, as illustrated in the figure below, showing what costs are and are not included in the estimation of the economic cost of obesity.

Firstly, if choice of lifestyle is assumed to be the primary cause of obesity, then enjoyment of this lifestyle offsets the cost of eating and drinking unhealthy food and beverages and the cost of clothing, housing, and transportation for oversized people. The same applies to the cost of insufficient or inadequate physical activity, because there is an opportunity cost on the time spent on sedentary activities that could take away from income-generating activities. This is the reason why economists exclude consumption costs and opportunity loss from sedentary activities from economic estimations of obesity.

Secondly, in terms of the wider, societal impact, obesity could generate businesses to cater to this segment of the population, such as fast-food chains, firms producing sugary beverages and high-calorie foodstuffs; clothing stores catering to oversized individuals; and paid programs for diet, fitness, and body “care” such as slimming procedures. On the other hand, these gains are negligible due to the fact that businesses cater to demands in different markets, and if there is no demand for obesity-specific products, they will turn to other areas. Thus, there is no opportunity lost from the shift from obesity-related business to other markets.

Lastly, the societal cost of obesity includes healthcare costs of treating obesity and obesity-related complications, and the opportunity cost of morbidity and premature mortality, including employee “presenteeism” (present at work but not fully productive) and “absenteeism” (short- or long-term absence from work). Most economists agree that only the last component—societal cost—should be counted in determining the economic cost of obesity.

This framework relies on the assumption of a perfect market and free choice for consumers. But if consumers have limited choices in terms of their consumption of unhealthy food (i.e., are unable to afford appropriate food) or their living or work conditions force them to have sedentary lifestyles, then the individual cost may not be offset by the individual gain. Theoretically, in this case, the individual cost should also be included in the economic cost. Having said that, it can be very challenging in practice to justify whose individual costs should be included and how to proportionally include them.

Several countries have estimated the social or economic cost of obesity to help inform the government and raise public awareness about the important problem of the obesity epidemic. Knowing what are the most significant cost components contributing to the social cost of obesity can inform policy development to help mitigate the impact. For example, all studies on the economic cost of obesity show that the indirect cost of premature morbidity and mortality is the major cost, accounting for more than half of the total cost. This means that the economic cost in the private sector is more than the estimated healthcare spending that some countries subsidize through public funds. Thus, employers and industries should encourage their staff to adopt healthy lifestyles, given it is them who bear most of the cost arising from sick leave and premature deaths of employees (as opposed to thinking that only the government spends on obesity-related healthcare cost).

Another example is that the economic cost of obesity in very young populations is higher than that in adult populations, which could prompt governments to adopt a greater policy focus on tackling childhood obesity. This type of research also requires a wealth of epidemiological, clinical, and economic data, which will in turn inform relevant public authorities on information gaps that would be of interest for the future in terms of monitoring the obesity situation and evaluating the policy interventions to ensure that obesity is managed within the population.

Photo: By Harmid (Own work) [Public domain], via Wikimedia Commons