Association for Public Policy Analysis & Management

Childhood obesity is a major public health problem in the United States and in many parts of the world, and there are large disparities by family income, with much higher rates of overweight and obesity among children in low-SES than in high-SES families (Poston and Foreyt 1999). Some scholars predict that increased family income will protect youth from the risks of becoming overweight or obese, for example by providing greater access to outdoor space, structured activities, and healthy food. It is also possible, however, that greater income will be spent on eating out and on passive entertainment, increasing obesity.  Correlational studies are unable to inform this important policy question, because unobserved parental traits may suppress the true association between income and children’s risks of being overweight or obese.

We take advantage of an emerging natural experiment – the extraction of natural gas in the Marcellus Shale geological formation – to study whether increasing family income affects children’s risks of being overweight or obese. Before recent technological advances, deep gas was not extractable and had no economic value; now, families who own mineral rights for land located above the Shale can receive payments upon signing a lease and royalties when gas is sold. There are three exogenous sources of variation in expected Marcellus Shale income: the quality of the shale below a property, the historical property rights in the area, and state law on whether extraction is allowed; Pennsylvania (PA) allows drilling, while New York (NY) does not. The combination of these three factors determines which families living above the Marcellus Shale receive income (in some towns, the average family receives an additional $15,000 per year in income after drilling begins); others, including many living in areas where similar drilling occurs, nonetheless experience no change in income.

Using predicted Marcellus Shale income based on these three factors as an instrument, we conduct difference-in-difference analyses with multiple comparison groups to isolate the causal effect of family income increases on rates of overweight and obesity for children in (a) elementary school and (b) middle- or high school. We conduct placebo tests using data from New York, where drilling of the Shale is not permitted and no changes in income occur, and we conduct a variety of robustness and specification checks. We find that plausibly exogenous increases in income lead to increased obesity in students across grades. Effects are concentrated in disadvantaged communities; we find no evidence that increased income affects childhood obesity in communities with high initial family incomes or parent education.  Our results suggest that increasing family income, in itself, is unlikely to address the childhood obesity epidemic.