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Title: The Causal Effect of Family Income on Childhood Obesity: A Fixed-Effect, Instrumental Variable Approach
Resulting in 1 citation.
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Bilaver, Lucy |
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The Causal Effect of Family Income on Childhood Obesity: A Fixed-Effect, Instrumental Variable Approach Presented: Boston, MA, Association for Public Policy Analysis and Management (APPAM) Research Conference, Thirty-second Annual, 4-6 November, 2010. Cohort(s): Children of the NLSY79 Publisher: Association for Public Policy Analysis and Management (APPAM) Keyword(s): Body Mass Index (BMI); Child Growth; Children, Poverty; Earned Income Tax Credit (EITC); Family Income; Modeling, Fixed Effects; Obesity; Variables, Instrumental; Wages Permission to reprint the abstract has not been received from the publisher. Recent evidence revealed negative income gradients in childhood obesity. While the association between family income and childhood obesity suggests that income transfers to the poor may lower obesity prevalence, there is no empirical evidence that the relationship is causal. The purpose of this paper is to determine whether family income has a causal effect on childhood obesity in a large sample of children measured every other year between 1986-2006. I employ a fixed-effects instrumental variable design first used by Dahl and Lochner (2005). The instrument is based on variation introduced by changes in the Earned Income Tax Credit (EITC). I construct an instrument by assuming that the effect of certain maternal characteristics on childhood obesity remain constant over time and that any narrowing of childhood obesity rates across subgroups are due to changes in income stemming from the EITC expansions and economic returns to baseline characteristics. The instrumental variable estimator yields a causal effect of family income on childhood obesity that is both robust to threats against omitted variable bias and to attenuation bias due to measurement error. I apply this strategy to the data on the children of the National Longitudinal Survey of Youth (NLSY) 1979. The sample includes up to 11 interviews with all children born to women in the original NLSY 79 sample. This sample was representative of U.S. children ages 14-22 in 1979. The current analysis includes over 9,000 children with at least one measurement of height and weight over the age of 2. Overall, the prevalence of obesity in this sample increased from approximately 9% in 1986 to over 20% in 2006. I find that a $10,000 increase in family income implies a nearly 6 point decrease in a child's position on the BMI percentile distribution. I also find that a $10,000 increase in family income implies a 5 percent decline in the probability of being =95th percentile (obese). Relative to the national childhood obesi ty prevalence of 17 percent, the results suggest the impact of the EITC expansions on childhood obesity were substantial. If the expansions of the EITC had not occurred, the prevalence of childhood obesity would be 1.5 percentage points higher than it is today. The evidence from this analysis shows that family income does have a causal effect on childhood obesity. The observed relationship of decreasing prevalence of obesity with increased family income withstands rigorous controls for time-constant and time-varying unobserved characteristics |
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Bibliography Citation
Bilaver, Lucy. "The Causal Effect of Family Income on Childhood Obesity: A Fixed-Effect, Instrumental Variable Approach." Presented: Boston, MA, Association for Public Policy Analysis and Management (APPAM) Research Conference, Thirty-second Annual, 4-6 November, 2010. |