Are Restaurants Really Supersizing America?

Abstract:     
While many researchers and policymakers infer from correlations between eating out and body weight that restaurants are a leading cause of obesity, a basic identification problem challenges these conclusions. We design a natural experiment using highways in rural areas to exploit exogenous variation in the effective price of restaurants and examine the impact on body mass. We find no causal link between restaurant consumption and obesity. Analysis of food-intake micro-data suggests that consumers offset calories from restaurant meals by eating less at other times. We conclude that regulation targeting restaurants is unlikely to reduce obesity but could decrease consumer welfare.

Number of Pages in PDF File: 67

Keywords: economics of regulation, health production, obesity, fat tax

JEL Classification: D12, H25, I12, I18

Accepted Paper Series