The Economics of Obesity

Why obesity has risen worldwide, including in India, the economic costs it imposes, and the policies that can help.

Obesity has risen dramatically around the world. The World Health Organization reported that in 2022, over 1 billion people worldwide were living with obesity. Rates have risen in rich and developing countries alike, including India, where overweight and obesity have increased especially in cities.

Why obesity has risen

Economists and health researchers point to several changes:

Cheaper calories: processed foods high in sugar, fat and salt have become cheap and widely available.
Less physical activity: more sedentary jobs, motorised transport and screen time.
Food environments: aggressive marketing, larger portion sizes and convenience foods.
Time costs: busy households have less time to prepare meals. Economists David Cutler, Edward Glaeser and Jesse Shapiro argued that technological changes lowering the time cost of preparing food contributed to rising obesity in the United States.

Economic costs

Health care: obesity raises the risk of diabetes, heart disease, some cancers and joint problems.
Productivity: more illness and disability reduce work.
India’s diabetes challenge: studies such as the ICMR-INDIAB survey have estimated that India has over 100 million people with diabetes.

Policies

Taxes on sugary drinks and unhealthy foods.
Front-of-pack labels that clearly show high sugar, fat or salt content. Chile introduced black warning labels in 2016, and research found purchases of labelled products fell.
Restrictions on marketing to children.
School food standards and physical activity.
Urban design that encourages walking and cycling.

Avoiding blame

Economists emphasise that obesity reflects environments, prices and incentives, not only personal choices. Stigma can harm health and discourage people from seeking help.

Chile's warning labels

In 2016, Chile required foods high in sugar, salt, calories or saturated fat to carry black stop-sign warning labels, and banned marketing them to children. Studies found purchases of sugary drinks fell significantly, and some companies reformulated products to avoid labels. Clear information and marketing limits changed both shoppers' and companies' behaviour.

Thinking obesity is only a rich-country problem

Obesity and diabetes have risen rapidly in low- and middle-income countries, including India. Many of these countries now face both undernutrition and obesity at the same time.

Key takeaways

Over 1 billion people worldwide were living with obesity in 2022, according to the WHO.
Cheaper calories, less activity and changing food environments drive the rise.
Obesity raises health costs and reduces productivity; India has over 100 million people with diabetes.
Taxes, warning labels, marketing limits and urban design can help.