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The Effects of Smoking on Obesity and Its Implications for Health Insurance

  • Journal of Insurance and Finance
  • 2012, 23(2), pp.111-132
  • Publisher : Korea Insurance Research Institute
  • Research Area : Social Science > Business Management

KIM DAEHWAN ORD ID 1 Key Hyo Lee 2 Jung, Ki-Taig 3

1보험연구원
2건강보험정책연구원
3경희대학교

Accredited

ABSTRACT

Although the obesity rate is low in Korea relative to developed countries, it has been rising due to high calory diet for life. Obesity attracts researchers' great attention since it creates not only higher personal medical costs, but also create the negative externality such as financial trouble of the public health insurance and higher insurance premium. Utilizing the most recent data sets of year 2008 and 2009 from Korea National Health and Nutrition Examination Survey, this study empirically investigates whether or not smoking affects obesity. In order to remove the potential endogeneity between smoking and obesity variable, we replace the smoking variable with secondhand smoking variable in the empirical model of logit. Empirical results prove that smoking decreases the likelihood of being obese. That is, if someone is a nonsmoker, she/he becomes more likely to be non-obese through secondhand smoking. This result consists with the medical rationale that smoking or nicotine causes weight loss since it burns calories and leads to the loss of appetite. Therefore, intensive antismoking campaigns could reduce cigarette smoking but the net effects of the antismoking campaigns on reducing financial trobles of the public health insurance and loss ratio of the private health insurance would be smaller than our expectation due to increasing obesity rates.

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