Obesity not the Problem to Economy Some Believe

April 14, 2008 (PLANSPONSOR.com) - Researchers for ING Wholesale Banking have concluded that future population changes are largely a reflection of the post-war baby boom, and even some relatively aggressive simulations of obesity growth have only small, perhaps negligible, impacts on economic growth or on the relative performance of asset prices.

The research report conceded that lack of any hard evidence for this conclusion makes it understandable that the government is working to remedy a perceived obesity “problem,” but warns that any proposed policies might have only limited benefits. The researches point out obesity is a lifestyle choice and government’s role is not to save individuals from themselves.

The researchers did find an impact on possible growth in the percentage of obese in the population on life expectancy, which would be relevant to the insurance industry. However, the report said this seems to make only a limited difference to the productive capacity of the population, since the majority of extra mortality occurs among individuals who have already retired, rather than in the younger and middle-age cohorts, whose labor drives economic growth.

In a simulation of the effect of growing obesity on fertility rates, the research found more significant results. “A 25% decline in fertility for the obese population could result in growth rates of 0.1% lower than those assumed in our base case,” the report said. However, that result would only materialize by 2025 and beyond.

The researchers started with a simulation assuming a 30% proportion of the population to be obese – nearly the same as the current reality – and did subsequent simulations assuming 50% of the population to be obese and to model the effect of obesity on fertility rates, and found the economic impacts of obesity to be only marginal.

To obtain a copy of “The fat of the land: The economic and market implications of US obesity,” email CommunicationsOffice.NewYork@americas.ing.com .