The health care costs of childhood obesity in Australia: An instrumental variables approach

The effect of childhood obesity on medical costs incurred by the Australian Government is estimated using five waves of panel data from the Longitudinal Study of Australian Children, which is linked to public health insurance administrative records from Medicare Australia. Instrumental variables estimators are used to address concerns about measurement error and selection bias. The additional annual medical costs due to overweight and obesity among 6 to 13 year olds is about $43 million (in 2015 AUD). This is driven by a higher utilisation of general practitioner and specialist doctors. The results suggest that the economic consequences of childhood obesity are much larger than previously estimated.