This research derives a health economic model to find the optimal level of health investment and mitigate the consequences of overweight and obesity by using the discrete time optimization. The methods used in this research were a state preference model of endowment economy to develop an optimal health model, and the Logit model for robustness. The first finding shows that the optimal level of health investment to mitigate the probability of sickness in the future that the marginal utility of three types of good (high-calorie good, low-calorie good and other consumption good), exercise, and weight in the first period are equal to the expected marginal benefit from spending on health development in the second period in the state preference model of endowment economy under uncertainty with perfect capital market. Secondly, agents are willing to prevent the probability of getting obesity rather than reduce the size of utility loss by purchasing the market insurance. Indeed, agents prefer self-insurance to market insurance. Furthermore, the social planner would collect tax on healthy wealthy people and subsidize the poor people which would satisfy the social optimal condition. Finally, the Logit Model shows the relevant results that gender has a significantly negative effect on the probability of being obese. This means that men have a higher probability of being obese than women. Still, the effect of age on the probability of being obese is positive and statistically significant. Conversely, exercise and the risk-mitigating spending from getting obese negatively impact on the probability of being obese. The estimated coefficients are statistically significant.
Overweight, Obesity, Optimal Health Investment, Public Health Model
Cite this paper
Pithak Srisuksai. (2019) Optimal Obesity Investment: Theory and Evidence. International Journal of Economics and Management Systems, 4, 1-12