The Role Of Uncertainty On U.S. Obesity: An Application Of Control Theory

This paper considers the problem of a consumer that cares about her health, which we proxy by deviations from current weight to ideal weight, and derives utility from eating and disutility from performing physical activity while taking into account the uncertainty associated with calorie consumption and physical activity. Using U.S. data, we find that uncertainty regarding the effectiveness of physical activity produces a larger cautionary response. Moreover, it is harder to learn and is more important to the agent than the uncertainty regarding the calorie content of food. These results can help policymakers design more cost effective policies.