Cynic Root

How private health expenditure promotes obesity. The “gym-fees” factor and obesity.

What do you do about physical fitness? You probably pay for gym membership. I suspect that gyms’ business models are based largely on the fact that most customers will make virtually no use of their membership.

The consumer psychology behind this: “I already pay a fortune for membership in a trendy gym, why would I want to invest more by waking-up early and going to the gym, when I really should wake-up early and go to work so I can pay for that gym?”

Indeed, people hate “losing” money by not consuming the services they paid for, but at 6am this logic eludes them. They hate waking up at 6am even more, so the extra sleep is more than worth the membership fee. (To sum this point: One pays for gym membership to be fit. One forfeits gym fees for extra sleep).

This logic applies to the more general subject of health insurance.

Let us look at 3 groups of people:

a) Those who cannot afford health insurance.

b) Those who pay a considerable part of their available income for health insurance.

c) Those who receive health insurance, or pay a small part of their available income for health insurance.

People in group (b) are subject to the the “gym-fees” factor: why would they pay more for healthier food when they just spent a fortune on their health. Indeed both health insurance and a healthy life style together are required to preserve one’s health, but isn’t paying for the gym almost as good as going to the gym?

People in group (a) are subject to this factor in a different way: They can’t pay for health anyway, buying more expensive, worse tasting food will not change this.

People in group (c) have more money or are more educated (thus, I suspect, are more likely to get good health insurance where they work, even if the salary is not very good). They’re perceived relative investment in life insurance isn’t as high, thus they can afford investing some more in healthier food (and gym membership).

This is another reason why the rich and educated are also less likely to be obese.

This argument is related to the arguments made by Becker and Posner in their recent blog posts (see more information about the Becker-Posner blog below). But, it leads to a somewhat different conclusion:

Reducing the private expenditure on health could be a good way to fight obesity.

Analysis of the relationship between private expenditure on health and obesity in different countries and populations could be a very interesting research subject. I have yet to find a good analysis of this. Please drop a note if you know of one.

A note about the Becker-Posner Blog

Gary Becker (an American economist and a Nobel laureate) and Richard Posner (A judge on the United States Court of Appeals for the Seventh Circuit in Chicago and a Senior Lecturer at the University of Chicago Law School) run a very interesting blog which I could describe as an economics blog, but it really deals with a variety of subjects from economic, legal and social points of view. Every week one of them writes a post about a subject and the other writes another post with comments and other perspectives.

In their recent pair of posts, Posner and Becker discuss health reform and obesity, mentioning a variety of causes for obesity and ways in which obesity could be reduced. Prices of fatty food, ignorance and discrimination in prices of health insurance are among these factors.

Posner’s post: http://www.becker-posner-blog.com/archives/2009/08/health_reform_a.html

Becker’s view: http://www.becker-posner-blog.com/archives/2009/08/the_growth_in_o.html