Nber Working Paper Series Incentives in Obesity and Health Insurance

The percentage of those uninsured in the U.S. has risen in recent years, although out-of-pocket expenditures have declined. At the same time, the obesity rate has significantly risen. We look at obesity in the context of a model in which the status of health insurance might play a role in influencing body weights. In this context, adverse selection is likely to be an issue, as those with ailments are more likely to sort themselves into being covered by insurance, or to be shut out of the health insurance market. At the same time, those who are insured might be more likely to be negligent when it comes to their health, or to be more careful due to the services they are receiving. Using 1993-2002 BRFSS data, we aim to isolate these opposing factors in determining the potential effect of health insurance status on obesity. We control for a variety of confounding factors that may influence obesity prevalence and address the endogenous nature of health insurance. We focus on isolating the effect of ex ante moral hazard rather than ex post moral hazard, and find little evidence of moral hazard in this context. Inas Rashad Georgia State University AYSPS 529 P.O. Box 3992 Atlanta, GA 30302-3992 and NBER [email protected] Sara Markowitz Rutgers University Department of Economics 360 Dr. Martin Luther King Jr. Blvd. Newark, NJ 07102 and NBER [email protected]