'Does Financial Insecurity Make People Obese?'

1. Biology of Fattening NLSY & ESI studies Concluding Remarks Does Financial Insecurity Make People Obese? Trenton G. Smith University of Otago, New Zealand Department of Economics 15 October 2014 Newcastle University Trent Smith Obesity & Economic Insecurity 1 / 35

2. Biology of Fattening NLSY & ESI studies Concluding Remarks Introduction: Obesity and Material Constraints Economic analysis of obesity typically emphasises: price (of calories, of fat, of physical exercise...) and income eects (poverty, wealth), perhaps conditioned on information (nutrition education, food labels, marketing...). One dimension typically left out is the role of stochastic nature of economic environments. I've argued that the extent to which income or material well-being is uncertain or at risk may well be more important than conventional explanations. Motivation is from behavioural biology: body fat as hedge against food shortage. Good news: clear theoretical predictions; opens door to sources of empirical evidence previously ignored in economics Bad news: higher moments dicult to measure; endogeneity (still) a hurdle Trent Smith Obesity Economic Insecurity 2 / 35

3. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Which of these two mice is starving? Trent Smith Obesity Economic Insecurity 3 / 35

4. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Endocrinology of Obesity: Leptin It has long been known that the obese-type mouse carries a recessive gene that causes it, under free-feeding conditions, to gain weight rapidly from birth while exhibiting the clinical symptoms of starvation: hyperphagia decreased body temperature lethargy diminished immune function infertility Since 1994 we've known that the ob/ob mouse lacks the gene that codes for leptin, a peptide hormone secreted by fat cells. In normal mice, leptin circulates in the bloodstream in proportion to the amount of body fat, sending a signal to the brain about availability of energy stores. Trent Smith Obesity Economic Insecurity 4 / 35

5. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Endocrinology of Obesity: Leptin, Cont'd The human homologue of the normal gene for leptin (Ob) and for the leptin receptor were quickly identi

6. ed. The mutant (ob) allele is exceedingly rare but has been medically documented. Parents of these children say that from birth they were ...constantly hungry, demanding food continuously and eating considerably more than their siblings. Initial optimism about leptin-based weight loss drugs has not panned out. Intriguing implications: ob eects suggest adaptive (evolutionary) function for body fat subjective beliefs encoded in our genes? Trent Smith Obesity Economic Insecurity 5 / 35

7. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Seasonal Fattening: Siberian Hamsters Many foraging animals (e.g., the Siberian hamster) fatten seasonally. The key environmental trigger appears to be photoperiod. In humans, seasonal aective disorder characterized by depression, hypersomnia, hyperphagia, and weight gain. Most commonly prescribed treatment: exposure to arti

8. cial light. Conversely, summer depression in humans causes insomnia, decreased appetite, and weight loss. Trent Smith Obesity Economic Insecurity 6 / 35

9. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Social Rank and Obesity: Willow Tits In natural settings, willow tits fall into stable binary dominance hierarchies that determine access to food supply. In spite of restricted access to food supply, subordinate tits typically fatter than their dominant counterparts. Theoretical explanation: fattening is an optimal response to increased risk of starvation. Interesting corollary: if food becomes scarce enough, direction of the gradient reverses. Similar pattern observed in humans? Trent Smith Obesity Economic Insecurity 7 / 35

10. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin SSRIs The molecular basis for the link between (indicators of) starvation risk and body weight are not well understood. There is suggestive evidence however that the serotinergic system in the brain is involved. Serotonin injected directly into (pigeon) brain suppresses appetite. SSRIs, widely used as antidepressants, can cause weight loss (and are sometimes even marketed as weight loss drugs). SSRIs (selective serotonin reuptake inhibitors) are thought to work by increasing levels of serotonin (5-HT) at neural synapses in the brain. Trent Smith Obesity Economic Insecurity 8 / 35

11. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Ecstasy as a Weight Loss Drug? 3,4-methylenedioxymethamphetamine (MDMA or ecstasy) developed by Merck in 1912 as a weight loss drug Acts via nicotinic receptor and serotonergic system MDMA induces weight loss via hyperthermia, loss of appetite, peripheral hyperactivity Never marketed because of adverse side eects: Feelings of euphoria and empathy, extreme comfort, belonging, and closeness to others, which can result in inappropriate and/or unintended emotional bonding. Speci

12. city of these eects suggests psychological state conducive to weight loss? Trent Smith Obesity Economic Insecurity 9 / 35

13. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin Tobacco Nicotine from tobacco is known to activate nicotinic receptors in the brain, which in turn activate the serotinergic system. Tobacco causes weight loss (or prevents weight gain). Smoking associated with unemployment,

14. nancial problems, reduced social contacts, lack of social support, and antidepressant use (indeed antidepressants are sometimes marketed as aids to smoking cessation). Coincidence of psychological correlates of economic security with weight loss (via tobacco) suggestive of a link between the two. Trent Smith Obesity Economic Insecurity 10 / 35

15. Biology of Fattening NLSY ESI studies Concluding Remarks Leptin Seasonality Sociality Serotonin The Insecurity Hypothesis Given apparent adaptive function of body fat, and many parallels between animal and human fattening, a natural question arises: Might variation in material risk drive incidence of obesity in the modern world? Trent Smith Obesity Economic Insecurity 11 / 35

16. Biology of Fattening NLSY ESI studies Concluding Remarks Identi

17. cation in NLSY The Economic Security Index Two Sources of Data A Weighty Problem The identi

18. cation problem in obesity research is dicult. individual choices (food, exercise, career choice...) aect BMI unobserved heterogeneity always a concern identi

19. cation strategy needed for causal inference ex: Smith et al. 2009 (FHEP) used local job market conditions to isolate eect of economic insecurity on body weight Moreover, economic insecurity is dicult to measure. (In 2009 study we relied on detailed employment histories to estimate income-loss risk...leaving us with cross-section only). Without an appropriate measure of economic insecurity, it is not possible to address the big question of its role in the overall trend in obesity. A new measure has recently become available for the US: the Economic Security Index (ESI). Trent Smith Obesity Economic Insecurity 12 / 35

21. cation in NLSY The Economic Security Index Two Sources of Data The Economic Security Index ESI developed by researchers at Yale's Institution for Social and Policy Studies. Uses US Current Population Survey (CPS), household incomes linked year-to-year by residence. ESI is de

22. ned as the probability of 25% drop in annual household income. (Adjusted for household size, out-of-pocket medical expenses, household debt service, buering eect of wealth, but excluding retirement events). ESI is available by gender, race/ethnicity, age, household structure, geographic (state) location, and year (currently back to 1986). Trent Smith Obesity Economic Insecurity 13 / 35

24. cation in NLSY The Economic Security Index Two Sources of Data Empirical Strategy Our strategy: focus on exogenous demographic characteristics: age, gender, race/ethnicity. Obesity data come from US National Health and Nutrition Examination Surveys (NHANES), which provide nationally representative repeated cross-sections with measured height and weight for the civilian population. NHANES surveys cover 2-3 year periods: 1990 NHANES III (phase 1), 1988{1991 1993 NHANES III (phase 2), 1992{1994 1999 NHANES 1999{2000 2001 NHANES 2001{2002 2003 NHANES 2003{2004 2005 NHANES 2005{2006 2007 NHANES 2007{2008 2009 NHANES 2009{2010 2011 NHANES 2011{2012 Trent Smith Obesity Economic Insecurity 14 / 35

26. cation in NLSY The Economic Security Index Two Sources of Data 50 40 30 20 Percent Obese US Obesity Rates, 18+ 1990 1993 1996 1999 2002 2005 2008 year White NH Men Black NH Men Hispanic Men White NH Women Black NH Women Hispanic Women Source: NHANES NHANES Trent Smith Obesity Economic Insecurity 15 / 35

28. cation in NLSY The Economic Security Index Two Sources of Data Trent Smith Obesity Economic Insecurity 16 / 35

30. cation in NLSY The Economic Security Index Two Sources of Data 80 70 60 50 40 30 20 10 0 80 70 60 50 40 30 20 10 0 80 70 60 50 40 30 20 10 0 Age 20-24 Age 25-29 Age 30-34 Age 35-39 Age 40-44 Age 45-49 Age 50-54 Age 55-59 Age 60-64 Age 65-69 Age 70-74 Age 75+ .1 .15 .2 .25 .3 .35 .1 .15 .2 .25 .3 .35 .1 .15 .2 .25 .3 .35 .1 .15 .2 .25 .3 .35 White NH Men Black NH Men Hispanic Men White NH Women Black NH Women Hispanic Women Percent Obese Economic Security Index (ESI) Trent Smith Obesity Economic Insecurity 17 / 35

32. cation in NLSY The Economic Security Index Two Sources of Data Empirical Speci

33. cation BMIij = ESIj + Xij

34. + ij where BMIij is individual i 's obesity status (body mass index 30), ESIj is individual i 's economic security index, as determined by year and exogenous demographic characteristics, Xij is a vector of i 's personal characteristics and exogenous demographic indicators (possibly including year of survey), and ij is a disturbance term. Linear probability model. Hypothesis of interest: HA : 0 Trent Smith Obesity Economic Insecurity 18 / 35

36. cation in NLSY The Economic Security Index Two Sources of Data Table 2: Eect of Economic Insecurity on Obesity: Role of Demographic FE (1) (2) (3) (4) (5) (6) (7) ESI 0.851*** 0.609*** 1.282*** 0.882*** 1.059*** -0.388*** 0.526*** 1993 0.0318*** 0.0307*** 0.0285** 0.0367** 1999 0.0981*** 0.0995*** 0.0984*** 0.0970*** 2001 0.0922*** 0.0910*** 0.0888*** 0.102*** 2003 0.110*** 0.107*** 0.103*** 0.126*** 2005 0.128*** 0.124*** 0.119*** 0.149*** 2007 0.119*** 0.113*** 0.106*** 0.147*** 20091 0.135*** 0.127*** 0.117*** 0.171*** Female 0.0235*** 0.00934 0.0155** 0.0441*** White NH 0.125*** 0.133*** 0.132*** 0.105*** Black NH 0.208*** 0.180*** 0.200*** 0.238*** Hispanic 0.140*** 0.119*** 0.132*** 0.160*** Age 25-29 0.0449*** 0.0504*** 0.0473*** 0.0492*** Age 30-34 0.0799*** 0.0871*** 0.0839*** 0.0884*** Age 35-39 0.113*** 0.128*** 0.119*** 0.122*** Age 40-441 0.136*** 0.155*** 0.143*** 0.149*** Age 50-541 0.161*** 0.182*** 0.166*** 0.170*** Age 60-64 0.180*** 0.198*** 0.186*** 0.189*** Age 65-69 0.153*** 0.163*** 0.156*** 0.160*** Age 70-74 0.116*** 0.113*** 0.115*** 0.114*** Age 75+ 0.00928 -0.00154 0.00444 0.00121 Yr*Grp FE No No No No No No Yes Trent Smith Obesity Economic Insecurity 19 / 35

38. cation in NLSY The Economic Security Index Two Sources of Data Table 3: Unemployment Other Measures of Income (1) (2) (3) (4) (5) (6) (7) ESI 0.526*** 0.534*** 0.496*** 0.541*** 0.499*** 0.516*** (0.139) (0.141) (0.154) (0.140) (0.154) (0.153) Mean PIR 0.00884 (0.0101) Unempl. Rate -0.236 -0.296 -0.107 -0.152 (0.187) (0.190) (0.209) (0.207) Employed -0.0251*** -0.0229*** (0.00788) (0.00789) Unemployed -0.0125 -0.0107 (0.0177) (0.0177) Married 0.0115* (0.00664) High School 0.0174** (0.00861) Some College 0.0171* (0.00913) College -0.0699*** (0.0110) Household Size 0.00544** (0.00219) Year*Group FE? Yes Yes Yes Yes Yes Yes Yes Trent Smith Obesity Economic Insecurity 20 / 35

40. cation in NLSY The Economic Security Index Two Sources of Data Table 4: Eect of Economic Insecurity by Demographic Characteristics (1) (2) (3) (4) (5) ESI 0.526*** ESI*1990 0.513* ESI*1993 0.400 ESI*1999 0.760 ESI*2001 0.649* ESI*2003 -0.383 ESI*2005 0.357 ESI*2007 0.527 ESI*2009 0.893** ESI*2011 0.869* Trent Smith Obesity Economic Insecurity 21 / 35

42. cation in NLSY The Economic Security Index Two Sources of Data Table 4: Eect of Economic Insecurity by Demographic Characteristics, Cont'd (1) (2) (3) (4) (5) ESI 0.526*** ESI*Male -0.323** ESI*Female 0.945*** ESI*Black NH 1.018*** ESI*White NH -0.475** ESI*Hispanic 0.618*** ESI*Other NH 0.176 ESI*Age 20-24 0.268 ESI*Age 25-29 0.552* ESI*Age 30-34 1.106*** ESI*Age 35-39 0.719*** ESI*Age 40-44 0.312 ESI*Age 45-49 0.936*** ESI*Age 50-54 0.245 ESI*Age 55-59 0.603* ESI*Age 60-64 0.216 ESI*Age 65-69 0.171 ESI*Age 70-74 -0.00465 ESI*Age 75+ 0.709* Trent Smith Obesity Economic Insecurity 22 / 35

44. cation in NLSY The Economic Security Index Two Sources of Data Table 6: Eect of Economic Insecurity: Alternative BMI Measures Dependent Variable BMI30 BMI BMI20 BMI25 BMI35 10yr wt change (1) (2) (3) (4) (5) (6) ESI 0.526*** 9.892*** 0.268*** 0.847*** 0.138 35.69*** (0.139) (2.192) (0.0779) (0.173) (0.0945) (11.18) Trent Smith Obesity Economic Insecurity 23 / 35

46. cation in NLSY The Economic Security Index Two Sources of Data Table 4C: Eect of Economic Insecurity on Child BMI z-scores (1) (2) (3) (4) (5) ESI 0.631*** ESI*1990 0.593 ESI*1993 1.435** ESI*1999 0.748* ESI*2001 -0.118 ESI*2003 0.891 ESI*2005 1.086** ESI*2007 -0.0730 ESI*2009 -0.0507 ESI*Male 0.174 ESI*Female 1.150*** ESI*Black NH -0.331* ESI*White NH 2.138*** ESI*Hispanic 0.108 ESI*Other NH 0.770*** ESI*Age 0-4 -0.355 ESI*Age 5-9 0.218 ESI*Age 10-14 1.319** ESI*Age 15-19 0.997*** Trent Smith Obesity Economic Insecurity 24 / 35

47. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Whitehall Study Stumbles upon a Natural Experiment Michael Marmot's Whitehall Study has followed more than 10,000 British civil servants for many years, conducting periodic interviews and medical exams to better understand the interaction of socioeconomic and employment experience with health outcomes. In the early 1990s one of the 19 departments covered by Whitehall (the Property Services Administration) was privatised. Because privatisation threatened the job security of PSA employees, Marmot's group had the opportunity to study the eects of the threat of insecurity, and then the eects of actual privatisation. Two eects in particular were noted (any guesses?). 1 An increase in body weight (0.5 kg for men, 1 kg for women). 2 An increase in the odds of sleeping 9 hours per night. Q: When do you suppose these eects were observed? (A: On the rumour. The uncertainty, not the change itself, seems to have triggered the response). Trent Smith Obesity Economic Insecurity 25 / 35

48. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion % Obese 35 30 25 20 15 10 0 Year 1980 1985 1990 1995 2000 2005 5 Australia Austria Canada Czech Republic Denmark England Finland France Iceland Italy Japan Netherlands New Zealand Spain Sweden Switzerland United States Trent Smith Obesity Economic Insecurity 26 / 35

49. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Economic Policy and Household-Level Risk Why has the obesity epidemic been more severe in some countries (US, Iceland, New Zealand, Australia, England, Spain...) than in others (France, Switzerland, Austria, Japan...)? Public policy can aect the extent to which households are subject to

50. nancial risks. In particular, over the past 35 years many countries have pursued neoliberal economic policies, characterized by: expanded international trade privatisation of state-owned assets oating exchange rate monetary policy emphasising price stability rather than full employment weakening of social safety net elimination of labour protections diminished antitrust enforcement Could obesity epidemic be an unintended side eect? Trent Smith Obesity Economic Insecurity 27 / 35

51. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Australia Finland United States Iceland Netherlands Japan Spain France Denmark New Zealand Sweden England Austria Switzerland Italy Canada Annual Growth in Obesity (%) 0 5 10 15 20 25 Revenue from Sales of State-Owned Enterprises (% of 1985 GDP) 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 Privatization and Obesity in the OECD, 1985-1999 Trent Smith Obesity Economic Insecurity 28 / 35

52. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Trent Smith Obesity Economic Insecurity 29 / 35

55. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion America's Great Risk Shift ESI suggests economic insecurity has risen in the U.S. since the 1980s. Why? Some likely culprits: 1974-present Health insurance subscriptions down (Hacker 2006) 1979-present Rising income instability (Gottschalk and Mott 2009) 1980-present Creative destruction stemming from decline in antitrust enforcement (Lynn 2010) 1981-present Pensions: from pooled to individual risk 1994-present NAFTA and outsourcing 1996-present Welfare reform 1999-present Financial deregulation Trent Smith Obesity Economic Insecurity 32 / 35

56. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Obesity and Welfare Regimes Trent Smith Obesity Economic Insecurity 33 / 35

57. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Summary Re ections Obesity and Insecurity The insecurity hypothesis is broadly consistent with the incidence of obesity in human populations. Open questions: particular cues? proximate mechanisms? Larger issue: does economic liberalisation (or, more generally, do economic incentives) always imply a trade-o between eciency insecurity? (...with opportunity to succeed comes threat of failure...) Trent Smith Obesity Economic Insecurity 34 / 35

58. Biology of Fattening NLSY ESI studies Concluding Remarks Insecurity and Economic Policy Conclusion Worries go down better with soup than without. {Jewish proverb Trent Smith Obesity Economic Insecurity 35 / 35

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