Government monetary incentives to reduce obesity rates

Abstract

Obesity is an ever increasing global epidemic which has now reached the leading health and economic issues concerning most developed countries. Governments have already implemented various strategy sets but outcomes are yet far from those desirable. This dissertation seeks to introduce a relatively recent weight loss policy intervention into the local scene. We are testing the hypothesis that the implementation of a monetary reward will positively affect society’s health related decision making. This paper explores whether or not the population would willing to participate in such scheme and whether the trade-off between the utility gained from unhealthy habits and benefits arising from financial incentives is enough to alter the Maltese populations’ lifestyle choices. Data is gathered via a distributed survey which is later analysed through the use of logit regression models in order to find the diverse factors that play a significant role in determining the probability of participation in such weight loss program and at what compensation, if any.

Findings reveal that: tailored results presenting BMI are ineffective; low-income cohorts would be willing to participate against less compensation; and that males and elders are more unwilling to participate. These results meet our expectations. We find that a monetary reward of €25 per kilogramme lost would be enough to encourage a minimum 49.50% of the Maltese population to participate. Further studies are needed before being able to conclude that it would result in clinically significant weight loss.