Seminar: Worth your weight
Experimental evidence on the benefits of obesity in low-income countries
The Centre for Health Economics at Monash Business School invites you to the research webinar 'Worth your weight: Experimental evidence on the benefits of obesity in low-income countries', presented by Elisa Macchi from the University of Zurich.
Evidence of status signalling is found even in very low-resource settings. Status signals may serve various purposes. In contexts where wealth information is scarce, as in developing countries, status signals may serve an economic function. This paper provides novel experimental evidence on the economic value of status signals in developing countries, by investigating the benefits of obesity in the urban area of Kampala, Uganda. In most developing countries obesity is akin to a status good. Using thin/fat manipulated pictures of real Kampala residents, I show that obesity is perceived as a strong and reliable wealth signal. To test for economic benefits, I cooperate with 124 small financial institutions offering credit in Kampala. In a real-stakes experiment I show that obese borrowers have easier access to credit, because loan officers screen borrowers based on body mass. Going from normal weight to obese improves access to credit as much as increasing one’s income by 60 percent. I pinpoint the mechanism by showing that reducing asymmetric information between borrowers and lenders reduces the obesity premium by about 70 percent, thus loan officers appear to engage in statistical discrimination. Looking at the consequences for credit provision, I provide suggestive evidence that most loan officers hold inaccurate beliefs about the income and body mass distribution. Thinking of potential health repercussions, by replicating the credit experiment with a sample of lay people, I show that the economic benefits of obesity are commonly known but generally overestimated. I discuss implication for anti-discrimination and obesity prevention policies.
Speaker
Elisa Macchi is a final year PhD student at the Zurich Graduate School of Economics at the University of Zurich and holds undergraduate degrees from the University of Bologna and Milano. She has recently been an invited visiting research fellow of Harvard University financed by the prestigious SNSF Mobility grant. Elisa is on the job market and will be available for interviews at the Virtual European Job Market 2020 and the ASSA 2021 Virtual Annual Meeting. Her research explores the intersection of development and experimental economics, in particular how the social environment affects economic and health outcomes, with a focus on developing countries.
CHE seminar series
At the Centre for Health Economics, we are working on running as many of our seminars as possible online while COVID-19 remains an obstacle to getting together. As we will be working with experts and colleagues in other parts of the world there will be some movement in the times and days that seminars run to take into account different time zones and availabilities. If you would like to be on our seminar email list, please be directly in contact by email to shannon.stanwell@monash.edu.
Hope to see you there!
Event Details
- Date:
- 28 October 2020 at 5:00 pm – 6:00 pm
- Venue:
- This seminar will take place via Zoom - please email shannon.stanwell@monash.edu to register
- Categories:
- Health Economics
Description
Experimental evidence on the benefits of obesity in low-income countries
The Centre for Health Economics at Monash Business School invites you to the research webinar 'Worth your weight: Experimental evidence on the benefits of obesity in low-income countries', presented by Elisa Macchi from the University of Zurich.
Evidence of status signalling is found even in very low-resource settings. Status signals may serve various purposes. In contexts where wealth information is scarce, as in developing countries, status signals may serve an economic function. This paper provides novel experimental evidence on the economic value of status signals in developing countries, by investigating the benefits of obesity in the urban area of Kampala, Uganda. In most developing countries obesity is akin to a status good. Using thin/fat manipulated pictures of real Kampala residents, I show that obesity is perceived as a strong and reliable wealth signal. To test for economic benefits, I cooperate with 124 small financial institutions offering credit in Kampala. In a real-stakes experiment I show that obese borrowers have easier access to credit, because loan officers screen borrowers based on body mass. Going from normal weight to obese improves access to credit as much as increasing one’s income by 60 percent. I pinpoint the mechanism by showing that reducing asymmetric information between borrowers and lenders reduces the obesity premium by about 70 percent, thus loan officers appear to engage in statistical discrimination. Looking at the consequences for credit provision, I provide suggestive evidence that most loan officers hold inaccurate beliefs about the income and body mass distribution. Thinking of potential health repercussions, by replicating the credit experiment with a sample of lay people, I show that the economic benefits of obesity are commonly known but generally overestimated. I discuss implication for anti-discrimination and obesity prevention policies.
Speaker
Elisa Macchi is a final year PhD student at the Zurich Graduate School of Economics at the University of Zurich and holds undergraduate degrees from the University of Bologna and Milano. She has recently been an invited visiting research fellow of Harvard University financed by the prestigious SNSF Mobility grant. Elisa is on the job market and will be available for interviews at the Virtual European Job Market 2020 and the ASSA 2021 Virtual Annual Meeting. Her research explores the intersection of development and experimental economics, in particular how the social environment affects economic and health outcomes, with a focus on developing countries.
CHE seminar series
At the Centre for Health Economics, we are working on running as many of our seminars as possible online while COVID-19 remains an obstacle to getting together. As we will be working with experts and colleagues in other parts of the world there will be some movement in the times and days that seminars run to take into account different time zones and availabilities. If you would like to be on our seminar email list, please be directly in contact by email to shannon.stanwell@monash.edu.
Hope to see you there!