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Is There An Association Between Gasoline Prices & Physical Activity?Evidence from American Time Use Data.

Sen, Bisakha (2011): Is There An Association Between Gasoline Prices & Physical Activity?Evidence from American Time Use Data.

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Abstract

Obesity is epidemic in the U.S, and there is an imperative need to identify policy tools that may help fight this epidemic. A recent paper in the economics literature finds an inverse relationship between gasoline prices and obesity-risk --- suggesting that increased gasoline prices via higher gasoline taxes may have the effect of reducing obesity prevalence. This study builds upon that paper. It utilizes cross-sectional time-series data from the American Time Use Survey over 2003-2008, utilizes the increases that occurred in gasoline prices in this period due to Hurricane Katrina and to the global spike in gasoline prices as a ‘natural experiment’, and explores how time spent by Americans on different forms of physical activity is associated with gasoline price levels. Economic theory suggests that higher gasoline prices may alter individual behavior both via a ‘substitution effect’ whereby people seek alternatives to motorized transportation, and an ‘income effect’ whereby the effect of higher gasoline prices on the disposable family budget lead people to make various adjustments to what they spend money on. The latter may lead to some increase in physical activity (for example, doing one’s own yard work instead of hiring help), but may also lead to decreases in other physical activities that involve expenses, such as team sports or work-outs at the gym. Thus, ultimately, the relationship between gasoline prices and physical activity must be empirically determined. Results from multivariate regression models with state and time fixed-effects indicate that higher gasoline prices are associated with an overall increase of physical activity that is at least moderately energy intensive. The increases are most pronounced in periods where gasoline prices fluctuate more sharply. These results appear robust to a number of model specifications. One of the major components of this increase appear to be an increase in housework that is at least moderately energy intensive – such as interior and exterior cleaning, garden and yard work, etc. This tentatively suggests that there is an ‘income effect’ of higher gasoline prices. However, the increases in physical activity associated with increased gasoline prices are weaker among minorities and low socioeconomic status (SES) individuals. Hence, while a policy which increases gasoline prices via raised gasoline taxes may have benefits in terms of increasing overall physical activity levels in the U.S., one concern is that these benefits may not accrue to low SES individuals to the same extent as to their higher SES counterparts.

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