What is the causal effect of income gains on youth obesity? Leveraging the economic boom created by the Marcellus Shale development.

Abstract

Low family income is frequently assumed to be a primary social determinant of youth obesity in the U.S. But while the observed correlation between family income and youth obesity is consistently negative, the true causal relationship is unclear. I take advantage of a natural experiment - the boom economy created by development of the Marcellus Shale geological formation for natural gas extraction - to study whether income gains affect youth obesity rates among Pennsylvania students. To test this relationship, I compile data from geological, administrative, Census and other governmental sources and estimate cross-sectional OLS regression models, longitudinal fixed effects models, and two-stage instrumental variable models within a difference-in-differences framework. Falsification tests indicate that children's location relative to the Marcellus Shale's geological boundaries is a valid instrument for income gains. Yet plausibly exogenous income gains do not alter youth obesity rates, regardless of the community's initial level of poverty or affluence and regardless of the child's grade level. Thus, the observed disparities in youth obesity by area income in Pennsylvania do not result from simple differences in disposable income and the relative cost of "healthy" versus "unhealthy" goods and services.