Worth Your Weight: Experimental Evidence on the Benefits of Obesity in Low-Income Countries
American Economic Review
vol. 113,
no. 9, September 2023
(pp. 2287-2322)
Abstract
I study the economic value of obesity—a status symbol in poor countries associated with raised health risks. Randomizing decision-makers in Kampala, Uganda to view weight-manipulated portraits, I find that obesity is perceived as a reliable signal of wealth but not of beauty or health. Thus, leveraging a real-stakes experiment involving professional loan officers, I show that being obese facilitates access to credit. The large obesity premium, comparable to raising borrower self-reported earnings by over 60 percent, is driven by asymmetric information and drops significantly when providing more financial information. Notably, obesity benefits and wealth-signaling value are commonly overestimated, suggesting market distortions.Citation
Macchi, Elisa. 2023. "Worth Your Weight: Experimental Evidence on the Benefits of Obesity in Low-Income Countries." American Economic Review, 113 (9): 2287-2322. DOI: 10.1257/aer.20211879Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- I12 Health Behavior
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification