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Petrol prices and obesity

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  • Kushneel Prakash
  • Sefa Awaworyi Churchill
  • Russell Smyth

Abstract

Using 13 waves of longitudinal data from Australia, we examine the relationship between petrol prices and obesity. Applying panel data models that control for individual fixed effects and the endogeneity of petrol prices, our results suggest that petrol prices have a negative effect on obesity. Specifically, our preferred instrumental variable estimates, which instrument for petrol prices using the Arca Oil Stock price and control for individual and time fixed effects, suggest that a standard deviation increase in petrol prices generates a 0.006 standard deviation decline in body mass index, while a unit increase in petrol prices results in a 2 percentage point decrease in the probability that a survey participant is obese. These results are robust to several sensitivity checks. Back of the envelope calculations suggest that our results imply that a permanent $1 per liter increase in petrol prices would reduce the number of people who were obese by 672,000 and save $1.4 billion dollars in medical expenditure related to obesity every year. We also find that frequency of participation in physical activity and expenditure on meals eaten out are channels through which petrol prices affect obesity.

Suggested Citation

  • Kushneel Prakash & Sefa Awaworyi Churchill & Russell Smyth, 2022. "Petrol prices and obesity," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1381-1401, July.
    • Handle: RePEc:wly:hlthec:v:31:y:2022:i:7:p:1381-1401
    DOI: 10.1002/hec.4513
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    Cited by:

    1. Awaworyi Churchill, Sefa & Asante, Augustine, 2023. "Neighbourhood crime and obesity: Longitudinal evidence from Australia," Social Science & Medicine, Elsevier, vol. 337(C).
    2. Koomson, Isaac & Zhang, Quanda & Prakash, Kushneel, 2024. "Entrepreneurship and subjective wellbeing in China: Exploring linkages and potential channels," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    3. Awaworyi Churchill, Sefa & Koomson, Isaac & Munyanyi, Musharavati Ephraim, 2023. "Transport poverty and obesity: The mediating roles of social capital and physical activity," Transport Policy, Elsevier, vol. 130(C), pages 155-166.
    4. Prakash, Kushneel & Awaworyi Churchill, Sefa & Smyth, Russell, 2022. "Are you puffing your Children's future away? Energy poverty and childhood exposure to passive smoking," Economic Modelling, Elsevier, vol. 114(C).
    5. Awaworyi Churchill, Sefa & Hayward, Mathew & Smyth, Russell & Trinh, Trong-Anh, 2023. "Crime, community social capital and entrepreneurship: Evidence from Australian communities," Journal of Business Venturing, Elsevier, vol. 38(2).
    6. Ackermann, Klaus & Awaworyi Churchill, Sefa & Smyth, Russell, 2024. "Estimating the relationship between ethnic inequality, conflict and voter turnout in Africa using geocoded data," World Development, Elsevier, vol. 180(C).
    7. Biondi, Beatrice & Mazzocchi, Mario, 2024. "An empirical analysis of the effect of economic activity and COVID-19 restrictions on road traffic accidents in Italy," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).

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