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Lose some, save some: Obesity, automobile demand, and gasoline consumption

Shanjun Li (), Yanyan Liu () and Junjie Zhang ()

Journal of Environmental Economics and Management, 2011, vol. 61, issue 1, 52-66

Abstract: This paper examines the unexplored link between the prevalence of overweight and obesity and vehicle demand in the United States. Exploring annual sales data of new passenger vehicles at the model level in 48 U.S. counties from 1999 to 2005, we find that new vehicles demanded by consumers are less fuel-efficient on average as a larger share of people become overweight or obese. The OLS results show that a 10 percentage point increase in obesity and overweight reduces the average MPG of new vehicles demanded by 1.4 percent, an effect requiring a 12 cent increase in gasoline prices to counteract. The 2SLS results after controlling for possible endogeneity in overweight and obesity prevalence put those two numbers at 5 percent and 54 cent, respectively. These findings, robust to a variety of specifications, suggest that policies to reduce overweight and obesity can have additional benefits for energy security and the environment.

Keywords: Automobile; demand; Gasoline; Greenhouse; gas; emissions; Obesity (search for similar items in EconPapers)
Date: 2011
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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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