Debt, Illness, and Obesity

Can personal indebtedness cause obesity? A sophisticated analysis of a large data set, the German Socio-Economic Panel, examined the effect of debt on illness, health satisfaction, and obesity. Researchers found that debt measures strongly correlate with health satisfaction, mental health, and obesity, but household debt does not have a causal effect on obesity.

German health economists examined the effect of household indebtedness on a number of health outcomes using 1999–2009 data from the German Socio-Economic Panel.  The paper’s dependent variables were overall health satisfaction, mental health, and obesity. Previous research has predictably found that there is a correlation between debt burden and bad health — both physical and mental. 

Using fixed-effects methods and controlling for other variables to establish a causal effect, the researchers applied different measures of household indebtedness, such as the percentage of household income spent on consumer credit and home loan repayments. The paper found that all debt measures were strongly correlated with health satisfaction, mental health, and obesity. Controlling for other factors found that household debt causally worsens physical and mental health, but there is no causal effect on obesity.

Click here to read the abstract in The Review of Income and Wealth, and click here to find a full manuscript of Ruhr Economic Papers #234, published on the Social Science Research Network.

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