Fast Food Prices, Obesity, and the Minimum Wage

28 Pages Posted: 21 Jul 2011

See all articles by Chad D. Cotti

Chad D. Cotti

University of Wisconsin - Oshkosh

Nathan Tefft

Bates College

Date Written: July 19, 2011

Abstract

Recent proposals argue that a fast food tax may be an effective policy lever for reducing population weight. Although there is growing evidence for a negative association between fast food prices and weight among adolescents, less is known about adults. That any measured relationship to date is causal is unclear because there has been no attempt to separate variation in prices on the demand side from that on the supply side. We argue that the minimum wage is an exogenous source of variation in fast food prices that, after controlling for household income, approximates a tax on fast food. In two-stage least-squares analyses, we find little evidence that fast food price changes affect adult BMI or obesity prevalence. Over the entire population and important subgroups, results are robust to including controls for area and time fixed effects, demographic characteristics, substitute prices, and numbers of establishments and employment in related industries.

Keywords: Fast Food Prices, Obesity, Body Mass Index, Minimum Wage

JEL Classification: I18, J38, H20

Suggested Citation

Cotti, Chad D. and Tefft, Nathan, Fast Food Prices, Obesity, and the Minimum Wage (July 19, 2011). Available at SSRN: https://ssrn.com/abstract=1890750 or http://dx.doi.org/10.2139/ssrn.1890750

Chad D. Cotti

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

Nathan Tefft (Contact Author)

Bates College ( email )

Lewiston, ME 04240
United States

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