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Fast food prices, obesity, and the minimum wage

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  • Cotti, Chad
  • Tefft, Nathan

Abstract

Recent proposals argue that a fast food tax may be an effective policy lever for reducing population weight. Although there is growing evidence for a negative association between fast food prices and weight among adolescents, less is known about adults. That any measured relationship to date is causal is unclear because there has been no attempt to separate variation in prices on the demand side from that on the supply side. We argue that the minimum wage is an exogenous source of variation in fast food prices, conditional on income and employment. In two-stage least-squares analyses, we find little evidence that fast food price changes affect adult BMI or obesity prevalence. Results are robust to including controls for area and time fixed effects, area time trends, demographic characteristics, substitute prices, numbers of establishments and employment in related industries, and other potentially related factors.

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  • Cotti, Chad & Tefft, Nathan, 2013. "Fast food prices, obesity, and the minimum wage," Economics & Human Biology, Elsevier, vol. 11(2), pages 134-147.
    • Handle: RePEc:eee:ehbiol:v:11:y:2013:i:2:p:134-147
    DOI: 10.1016/j.ehb.2012.04.002
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    2. Brady P. Horn & Johanna Catherine Maclean & Michael R. Strain, 2017. "Do Minimum Wage Increases Influence Worker Health?," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1986-2007, October.
    3. Kathryn L. Clark & R. Vincent Pohl & Ryan C. Thomas, 2020. "Minimum Wages And Healthy Diet," Contemporary Economic Policy, Western Economic Association International, vol. 38(3), pages 546-560, July.
    4. Pohl, R. Vincent & Clark, Kathryn L. & Thomas, Ryan C., 2017. "Minimum Wages and Healthy Diet," MPRA Paper 87239, University Library of Munich, Germany.
    5. Otto Lenhart, 2017. "The impact of minimum wages on population health: evidence from 24 OECD countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(8), pages 1031-1039, November.
    6. Jiwei Chen, 2021. "Do minimum wage increases benefit worker health? Evidence from China," Review of Economics of the Household, Springer, vol. 19(2), pages 473-499, June.
    7. Alviola, Pedro A. & Nayga, Rodolfo M. & Thomsen, Michael R. & Danforth, Diana & Smartt, James, 2014. "The effect of fast-food restaurants on childhood obesity: A school level analysis," Economics & Human Biology, Elsevier, vol. 12(C), pages 110-119.
    8. Elena Andreyeva & Benjamin Ukert, 2018. "The impact of the minimum wage on health," International Journal of Health Economics and Management, Springer, vol. 18(4), pages 337-375, December.
    9. David Neumark, 2023. "The Effects of Minimum Wages on (Almost) Everything? A Review of Recent Evidence on Health and Related Behaviors," NBER Working Papers 31191, National Bureau of Economic Research, Inc.
    10. Chen, Lipeng & Liu, Wanlin, 2022. "The effect of Internet access on body weight: Evidence from China," Journal of Health Economics, Elsevier, vol. 85(C).
    11. Hafner, Lucas, 2019. "Do minimum wages improve self-rated health? Evidence from a natural experiment," FAU Discussion Papers in Economics 02/2019, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    12. Bamikole, Oluwafemi, 2013. "The Impact of Minimum Wage on Average Earnings in the Caribbean using Two-Selected Countries, Trinidad and Tobago and Jamaica (1980-2011 and 1997-2011)," MPRA Paper 57363, University Library of Munich, Germany.
    13. Cawley, John, 2015. "An economy of scales: A selective review of obesity's economic causes, consequences, and solutions," Journal of Health Economics, Elsevier, vol. 43(C), pages 244-268.
    14. Sigaud, Liam & Daley, Angela & Rubin, Jonathan & Noblet, Caroline, 2022. "The effects of recent minimum wage increases on self-reported health in the United States," Social Science & Medicine, Elsevier, vol. 305(C).
    15. Gračner, Tadeja, 2021. "Bittersweet: How prices of sugar-rich foods contribute to the diet-related disease epidemic in Mexico," Journal of Health Economics, Elsevier, vol. 80(C).
    16. Romich, Jennifer L. & Althauser, Anne K. & Allard, Scott William & Long, Mark C. & Vigdor, Jacob, 2018. "Linking Administrative Data to Understand Effects of Seattle’s $15 Minimum Wage Ordinance," OSF Preprints egvwq, Center for Open Science.

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    More about this item

    Keywords

    Fast food prices; Obesity; Body mass index; Minimum wage;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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