As an empirical example of this externality, we analyze the innovation induced by the obesity epidemic. Obesity is … associated with an increase in the incidence of many diseases. The induced innovation hypothesis is that an increase in the … incidence of a disease will increase technological innovation specific to that disease. The empirical economics literature has …

opportunities. The paper also provides new evidence on induced pharmaceutical innovation. In both cases we use the change in the … demographic structure of the market (measured by age structure and obesity prevalence) to test the induced innovation hypothesis … pharmaceutical innovation responds to aging- and obesity-induced changes in potential market size …