The Impact of Obesity on Consumer Bankruptcy

- We used a duration model to assess if obesity contributes to individual bankruptcy.
- The risk of filing for bankruptcy is 22 percent higher for individuals who are obese.
- Our findings are robust to accounting for endogeneity.

Over the last two decades, both bankruptcy and obesity rates in the U.S. have seen a steady rise. As obesity is one of the leading causes of medical and morbidity related economic costs, its influence on personal bankruptcy is analyzed in this study. Using the National Longitudinal Survey of Youth 1979, we employ a duration model to investigate the relative importance of obesity on the timing of bankruptcy. Even after accounting for possible endogeneity of BMI and controlling for a wide variety of individual and aggregate-level confounding factors, being obese puts one at a greater risk of filing for bankruptcy.