Higher obesity rates appear to contribute to higher bankruptcy rates in the United States
A study published in Economics and Human Biology found that, across 3,125 US counties, a higher obesity rate was associated with increased filings for bankruptcy.
Obesity has been linked to an increased likelihood of experiencing poor health, including heart disease and diabetes. These health consequences often impose high medical costs on sufferers, leading to financial stress. Study author Masanori Kuroki wanted to shed light on the financial toll of obesity in the United States, using a nationally representative sample.
“Given the extent of the obesity epidemic facing the United States, the economic costs of obesity have been one of the most important topics in public health. This paper uses the bankruptcy rate as a proxy for financial distress and makes use of county-level data to comprehensively add to the literature on the economic costs of obesity,” Kuroki says.
Kuroki procured data from the Centers for Disease Control and Prevention on the obesity rates from 3,125 US counties in fifty states, between the years 2004 and 2016. He also procured the bankruptcy rates from each county, via the US Court (2019) and Public Access to Court Electronic Records (PACER). Since it was reasoned that there should be a delay between financial distress related to obesity and the filing for bankruptcy, Kuroki used bankruptcy rates from between 2005 and 2017.
Kuroki’s analysis looked for associations between obesity rates and two types of bankruptcies. Results showed that, overall, counties with higher obesity rates had higher bankruptcy rates, even after taking into account the demographic variables, time trends, and economic conditions specific to each county.
As Kuroki says, “a one-percentage point increase in the obesity rate is associated with a 0.02-0.03 increase (or a 1.0 percent increase) in Chapter 7 bankruptcy rates per 1,000 residents and a 0.02-0.04 increase (or a 3-4 percent increase) in Chapter 13 bankruptcy rates per 1,000 residents.”
Kuroki also examined associations between the local median income of each county and its bankruptcy filings. Interestingly, the analysis showed that bankruptcy rates were higher in counties that had a higher median income. “This is somewhat counterintuitive,” Kuroki says, “but it may be due to that bankruptcy is an imperfect measure of financial distress because of the costs. Many people who cannot or will not repay their debts do not file for bankruptcy because of the attorneys’ fees for a bankruptcy filing.”
The author addresses the fact that individuals with obesity suffer in other aspects of life that lead them to financial stress, beyond increased medical expenses. For example, obesity has been linked to increased disability incidents, lower wages, and discrimination, which can also add to the financial suffering of those with obesity.
The study, “Obesity and bankruptcy: Evidence from US counties”, was authored by Masanori Kuroki.