Health Economics Seminar

Date: February 3, 2016
Time: 12:00 pm - 1:30 pm (Lunch provided compliments of the Hoover Institution)
Location: Lou Henry Hoover Bldg., Conf. Rm 101
Speaker: Heather Schofield, PhD
Assistant Professor, Department of Medical Ethics and Health Policy, The Wharton School, Univ. of Pennsylvania
Title: The Economic Costs of Low Caloric Intake: Evidence from India


Many of the world’s poor consume very few calories; one-seventh of the world’s population remains below recommended intake levels. Yet, the impact of this nominally low caloric intake on productivity is unclear. This paper presents two analyses which find that changes in caloric intake result in substantial and broadly generalizable changes in productivity among malnourished adults in India. The first draws on a five-week randomized controlled trial among cycle-rickshaw drivers in Chennai, in which half of the participants received an additional 700 calories per day. Treated individuals showed significant improvements in both physical and cognitive tasks and increased labor supply and income by approximately 10 percent by the final week. The second study examines the impact of a 700 calorie per day decline in intake, caused by fasting during Ramadan, on agricultural production. This analysis leverages heterogeneity in cropping cycles between and within districts as well as the fact that Ramadan cycles throughout the calendar year to generate three sources of variation in the overlap between fasting and the labor intensive portions of the cropping cycle. Using a triple-difference approach, I find that overlap between Ramadan and the labor intensive portions of cropping cycles results in declines in production which correspond to a 20 to 40 percent decrease in productivity per fasting individual. Multiple sources of evidence suggest that production declines are driven primarily by reduced caloric intake rather than by other behavioral changes during Ramadan. The estimated return to investment in additional calories is positive, with point estimates of 75 percent over six months in the randomized trial and 225 percent over one month during Ramadan fasting. Given substantial evidence that traditionally hypothesized liquidity constraints do not meaningfully limit caloric consumption, the low caloric intake of the majority of Indian adults presents a puzzle in light of the high estimated returns. Responses from an incentivized survey suggest that inaccurate beliefs about both the returns to calories and the caloric content of foods may play a role in the low levels of caloric consumption. 

Suggested reading: The Economic Costs of Low Caloric Intake: Evidence from India (Version: December 15, 2014).

Bio:  ​​​Prof. Schofield’s research ​ ​lies at the intersection of  development, health, and behavioral economics. ​Her most recent work focuses on the role of factors such as  nutrition, pain, ​and sleep  in  ​shaping ​ economic productivity  cognitive function ​, and decision-making​.

​Prof. Schofield has co-founded a Behavioral Economics Lab in Chennai, India, where much of her research is based. ​She  completed her Ph.D. in Business Economics, MS  in Global Health and Population, and BA  in Economics at Harvard University.