The Medical Cost Attributable to Obesity and Overweight in China: Estimation Based on Longitudinal Surveys

With its rapid economic growth and fast changing lifestyle, China witnessed expansionary prevalence of obesity and overweight during the recent decades. This paper provides the first nationally representative estimate of the medical cost attributable to obesity and overweight in China. We improve upon the traditional estimation methodology (two-part model) by jointly adopting the instrumental variable approach and the panel data methods in order to correct for the potential endogeneity of body size and the individual heterogeneity in medical expenditure. Using longitudinal data from 2000-2009 China Health and Nutrition Surveys, we find that body size has a significant impact on the individual expected medical expenditure and the per capita medical cost attributable to obesity and overweight in a single medical event is estimated to be 6.18 Yuan, or 5.29% of the total personal medical expenditure. This translates to 24.35 billion Yuan annual cost on the national scale, accounting for 2.46% of China's national health care expenditure. The subsample analyses also show that such cost is higher for the urban, women, and better educated people and increases over time. Our results contribute to the literature on the economic impact of obesity in developing countries and bear policy implications on controlling the rising health care costs in China. Copyright © 2015 John Wiley & Sons, Ltd.