Paying for Weight Loss

I find it fascinating that there is panic about the fact that citizens of many high-income countries are getting obese and that this translated as a worrying public health problem. Similar to the policy questions around climate change, there is no doubt that the proportion of those defined as clinically overweight and obese has risen over the last three decades. A number of people wrongly blame McDonald's restaurants and other fast foods that have altered conventional eating. A more plausible but partial explanation is the high subsidies for corn farmers that have led to a deluge of cheap corn syrup within the US.

However, the most original attempt at reversing weight loss has come from the Italian town of Varallo, whose mayor has not only direct financial rewards for weight loss. The system of cash incentives would impress any economist as it not only pays the initial $ 67 upon attainment of the ideal weight but will pay out a further US$ 268 for maintaining that ideal weight for five months thereafter. Perhaps informed by the fact that weight loss is comparatively easier than maintenance over the medium-term, the mayor has committed the town to further pay the equivalent of US$ 670 for residents who retain the ideal weight for a year more and thereby reinforce desired behavior. The story does not state it but I am thinking that the 30 upfront applicants may require enhanced payment beyond the first year to keep their ideal weight and also that the number of applicants will definitely rise.

While I am unsure about whether the mayor has conducted a proper cost benefit analysis to determine whether its overweight residents are a burden that justifies this expenditure, he gets full marks for the thought that went into the design of this incentive structure without resorting to undue compulsion. This is a sound experiment and over time, the town may be an example to cities that consider it necessary to encourage residents to loss weight. Off the top of my head, this is far more efficient than paying for a gastric bypass. I hope to visit Varallo and witness this sound experiment in applied economics. Mr. Gianluca Bonnanno should be small town mayor of the year.