American Economic Journal Applied Economics 3 January 2011 152 188 http www aeaweb org articles php doi 10 1257 app 3 1 152 Are Restaurants Really Supersizing America By Michael L Anderson and David A Matsa While many researchers and policymakers infer from correlations between eating out and body weight that restaurants are a leading cause of obesity a basic identification problem challenges these conclusions We exploit the placement of Interstate Highways in rural areas to obtain exogenous variation in the effective price of restaurants and examine the impact on body mass We find no causal link between restaurant consumption and obesity Analysis of food intake micro data suggests that consumers offset calories from restaurant meals by eating less at other times We conclude that regulation targeting restaurants is unlikely to reduce obesity but could decrease consumer welfare JEL I12 I18 L51 L66 There s nobody at McDonald s shoving fries in your mouth Bonnie Modugno McDonald s Chief Nutritionist1 O besity rates in the United States have been growing rapidly in recent years Whereas 15 percent of Americans were obese in 1980 defined as having a body mass index of at least 30 34 percent were obese in 2004 Center for Disease Control 2007 The time series of obesity rates in the United States plotted in Figure 1 solid line reveals that the rate of increase over the past quarter century has been substantially greater than during the preceding two decades Medical research has linked obesity to diabetes heart disease stroke and certain cancers Treating these diseases is expensive Health care spending attributed to obesity reached 78 5 billion in 1998 and continues to grow Eric A Finkelstein Ian C Fiebelkorn and Guijing Wang 2003 Although obesity is a serious and growing problem its causes are not well understood Anderson Department of Agricultural and Resource Economics University of California Berkeley 207 Giannini Hall MC 3310 Berkeley CA 94720 3310 e mail mlanderson berkeley edu Matsa Kellogg School of Management Northwestern University 2001 Sheridan Road Evanston IL 60208 e mail dmatsa kellogg northwestern edu We thank Patricia Anderson Joshua Angrist David Card Carlos Dobkin Michael Greenstone Alex Mas Amalia Miller Enrico Moretti Kathryn Shaw May Wang and seminar participants at Columbia University Georgetown University IUPUI Northwestern University Stanford University Tel Aviv University UC Berkeley the 2009 AEA Annual Meeting and the NBER Summer Institute for helpful comments Ellen Kersten David Reynoso Tammie Vu and Kristie Wood provided excellent research assistance We appreciate the cooperation of the Departments of Health of Arkansas Colorado Iowa Kansas Maine Missouri North Dakota Nebraska Oklahoma Utah and Vermont in providing the confidential data used in this study Their cooperation does not imply endorsement of the conclusions of this paper To comment on this article in the online discussion forum or to view additional materials visit the article page at http www aeaweb org articles php doi 10 1257 app 3 1 152 1 Kim Severson The Obesity Crisis San Francisco Chronicle March 7 2004 152 Vol 3 No 1 Anderson and Matsa Are Restaurants Really Supersizing America 35 153 125 100 Obesity rate percent 25 75 20 15 50 10 25 Obesity rate 5 Restaurants per thousand square miles 30 Restaurant density 0 1960 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 Figure 1 Obesity Rates and Restaurant Density 1960 2004 Notes This figure plots the obesity rate and restaurant density in the United States from 1960 through 2004 The obesity rates are age adjusted estimates for the percent of adults aged 20 74 with a body mass index greater than or equal to 30 based on the National Health and Nutrition Examination Survey Katherine M Flegal et al 2002 Centers for Disease Control 2007 The restaurant density rates are the number of full service and limited service restaurant establishments per thousand square miles reported by the Economic Census One popular idea among public health advocates is that eating restaurant food causes obesity 2 Restaurant food has high caloric content and the portion sizes served are relatively large Lisa R Young and Marion Nestle 2002 Concerned policymakers are turning to new regulations on restaurants in efforts to fight obesity For example in response to high obesity rates in low income neighborhoods the Los Angeles City Council unanimously approved a law on July 29 2008 banning the opening of new fast food restaurants in a 32 square mile area containing 500 000 residents Tami Abdollah 2007 Molly Hennessy Fiske and David Zahniser 2008 State legislators in Mississippi which is reported to have the highest obesity rate in the world recently proposed legislation that would prohibit any restaurant from serving obese customers the bill died in committee Bobby Harrison 2008 Nanci Hellmich 2008 If large portions and effective marketing presentation and pricing lead people to eat more when they go to restaurants than when they eat at home then these regulations may be effective But it is not obvious that the empirical link between eating at restaurants and obesity is causal If consumers lifestyles are increasingly conducive to excess energy 2 Other hypotheses include changes in food prices increasingly sedentary lifestyles and technological change in food production Darius Lakdawalla and Tomas Philipson 2002 David M Cutler Edward L Glaeser and Jesse M Shapiro 2003 Lakdawalla Philipson and Jay Bhattacharya 2005 Sara Bleich et al 2008 154 American Economic Journal applied economics JANuary 2011 intake and positive energy balance the increasing prevalence of restaurants may simply reflect a greater demand for calories The case against restaurants centers on well known correlations showing that the frequency of eating out is positively associated with greater fat sodium and total energy intake as well as with greater body fat These correlations have been established using a broad range of datasets and study populations for examples see Linda H Eck Clemens Deborah L Slawson and Robert C Klesges 1999 M A McCrory et al 1999 J K Binkley J Eales and M Jekanowski 2000 S A French L Harnack and R W Jeffery 2000 Ashima K Kant and Barry I Graubard 2004 J Maddock 2004 Susan H Babey et al 2008 Furthermore the number of restaurants and the prevalence of obesity have been rising for a number of decades In addition to the obesity rate Figure 1 shows the growth of restaurant density in the United