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Is There an Association Between Gasoline Prices and Physical Activity? Evidence from American Time Use Data

Authors

  • Bisakha Sen


Abstract

Obesity is epidemic in the United States, 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 (ATUS) 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 leads 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 workouts 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 and unexpectedly. These results appear robust to a number of model specifications. One of the major components of this increase appears to be an increase in housework that is at least moderately energy intensive—such as interior and exterior cleaning, garden, and yard work. This tentatively suggests that there is an income effect of higher gasoline prices, or a possible increase in prices of such services when gasoline prices increase. 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 that increases gasoline prices via raised gasoline taxes may have benefits in terms of increasing overall physical activity levels in the United States, these benefits may not accrue to low SES individuals to the same extent as to their higher SES counterparts. This suggests that if increasing physical activity is the primary goal, then it may be more efficient to use a tax that can exert an income effect on mid-to-high SES households, such as a targeted income tax. On the other hand, if gasoline taxes are imposed to address other negative externalities of gasoline use, then these taxes may have the added benefit of increasing physical activity at least among some segments of U.S. society.

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