Determinants of obesity in Brazil: the effects of trade liberalization and socio-economic variables

This article aims to evaluate a possible relation between increased Brazilian trade openness and increasing observed rates of overweight and obesity during the last 25 years. We develop an economic model where formal trade barriers are eliminated, and resulting sociocultural outcomes such as the adoption of westernized lifestyle in traditional non-western countries prevails, which could imply a health externality. In order to empirically analyse the influence of trade flows on overweight and obesity in Brazil, a balanced fixed-effects panel model has been estimated. Data for the 26 Brazilian states plus the Federal District are run for 1988/1989, 2002 and 2008. We found that an increase in trade openness leads to an increase in overweight and obesity ratios in Brazil. Hence results seem to point that there is a health externality in Brazil due to trade liberalization. However, more consistent evidence may be necessary to convince politicians and policymakers that any interference will be necessary to correct this externality.