Alcohol Consumption and Body Weight J. Catherine Maclean, M.A. Addiction Health Services Research Conference October 24-

1. Alcohol Consumption and Body WeightJ. Catherine Maclean, M.A.Addiction Health Services Research ConferenceOctober 24-26, 2005Santa Monica, CA Health Economics Research Group

2. Motivation • According to the recent data, the majority of Americans are now overweight (Must et al, 1999; Flegal et al, 2002) • Between 1980 and 2000 the prevalence of overweight increased 40 percent and obesity 110 percent (Flegal, Carroll, Ogden, & Johnson, 2002) • Overweight and obesity increase individual risk for a range of negative health conditions (i.e., heart disease, stroke, high blood pressure, cancer, and diabetes) • Elevated rates of chronic disease among the obese have increased health care costs to society, in 2000 the estimated total cost of overweight and obesity was $117 billion U.S. dollars (U.S. Department of Health and Human Services, 2001) • Health officials view current obesity rates as problematic and seek policies and programs to reduce weight • Physiologically obesity is clearly understood as the consequence of a calorie imbalance: calories consumed > calories expended • Ambiguity over the cause (s) of the current high levels of obesity

3. Current Study • Objectives • Examine relationship between alcohol consumption and weight status using an economic framework • Hypotheses • Alcohol use is endogenous in the weight status specifications • Alcohol use is positively related to body weight, increases the probability of overweight and/or obese, and decreases the probability of underweight

4. Economic Interpretation of Current Weight Levels • A number of technological, economic, and social changes have taken place over the past few decades and altered income levels and relative prices (Grossman et al 2002, 2005; Philipson et al 2002, 2003; Cutler, Glaiser, & Shapiro, 2003) • These changes have simultaneously decreased the relative price of calorie consumption, increased the relative price of exercise, and increased income levels • Observed weight levels are the result of fully-informed rational individuals responding to the new economic environment and maximizing utility; not evidence of a market failure • Government intervention to lower weight is not an efficient use of resources nor will such action increase welfare • Government action may be welfare enhancing if: • Costs of obesity imposed on society are greater than the utility derived by overweight and obese individuals from their calorie consumption, calorie expenditure, and weight status • Individuals are not rational and/or are not fully informed on the causes and/or consequences of obesity

5. Role of Alcohol Relative price of alcohol has fallen over past several decades Theory tells us that individuals will consume more alcohol in the new economic environment Alcohol is both a high calorie beverage and an intoxicating and addictive substance that can affect individuals’ cognitive processes and ability to evaluate costs and benefits If alcohol use is identified as a risk factor for elevated weight status through its influence on rationality, policies to reduce alcohol consumption may increase social welfare

6. Data • National Epidemiological Survey of Alcohol and Related Conditions (NESARC) Wave 1 • Recent (2001-2002) • Large (43,083 respondents) • Nationally representative • Height and weight information • Comprehensive alcohol use items • Over-samples previously under-represented sub-groups • Geographic identifiers

7. Measures • Body Weight • Body Mass Index (BMI) • Underweight (BMI < 18.5) • Overweight and/or Obese (BMI > 25) • Obese (BMI > 30) • Alcohol Use • Current drinking • Days drinking to intoxication • Abuse and/or dependence • Former drinking included in all specifications • Standard covariate set (age, sex, race, ethnicity, country of birth, region, employment, educational attainment, income, marital status)

8. Descriptive Statistics

9. Methods • Exogeneity of alcohol consumption rejected in BMI, overweight and/or obese, and obese specifications; exogeneity could not be rejected in underweight specification • Statistical models • BMI specification: Two Stage Least Squares • Overweight and/or obese and obese specifications: Amemiya’s Generalized Least Squares (Newey, 1987) and two-stage residual inclusion method (Rivers and Vuong, 1988) • Underweight: Probit • Instrumental Variables • State-level beer tax and beer tax squared • Dichotomous indicators for a parent or sibling who has/had a problem with alcohol

10. Results • All 3 current alcohol use measures related to weight status outcomes in hypothesized directions, most at statistically significant levels • Examples • Current drinking associated with a 5.9 unit increase in BMI • One additional day drinking to intoxication associated with a 10 percentage point increase in the probability of obesity • Diagnosis of alcohol abuse and/or dependence associated with a 26 percentage point increase in the likelihood of overweight and/or obese

11. Discussion • Unique contribution of research: first study to employ an economic framework and econometric techniques to examine the alcohol-weight status relationship • Extensions • Use correction factor for self-reported BMI outlined by Lee & Sepanski (1995), Cawley (2000), and Bound et al (2002) • Gender specific analyses • Utilize future waves of NESARC to examine longitudinal relationship between alcohol use and weight status • Implications for policy • Current research documents and quantifies link between alcohol consumption and weight status