The Effect of Income on Obesity among Canadian Adults

Although a large body of research demonstrates an association between income and obesity, the causal nature of this relationship remains largely unclear. Using five biennial confidential master files (2000/01-2009/10) of the Canadian Community Health Survey, we examine the causal effect of income on adult body mass index (BMI) and obesity in Canada using an instrumental variables (IV) approach. The neighbourhood level unemployment rate and household income are the instruments used to identify the causal effect. Our results show that the income elasticity of BMI is -0.113 for women and -0.027 for men. These findings suggest that for a person of average height, a 1% increase in income leads to a weight reduction of 0.300 kg and 0.084kg for women and men, respectively. We find that a 1% increase in household income leads to a 0.76% and 0.27% decrease in the probability of being obese for women and men, respectively. Our quantile IV results reveal that the negative effect of income on BMI increases consistently over the BMI distribution in women, while for men it is statistically significant only at the higher end of the BMI distribution. Contrary to theoretical expectations, we do not find any evidence of a larger negative effect of income on BMI and obesity for more educated people. Our findings suggest that household income is potentially an important modifiable risk factor for obesity, especially among women.