Obesity as a Sign of Wealth in Low-Income Countries

In Uganda, where nearly half the population eats fewer calories than they need each day, excess fat is often a sign of wealth and can help get a bank loan, according to a forthcoming article in The American Economic Review. Loan officers use whatever bits of evidence they can find to help make critical economic decisions. The study found that loan officers were more likely to rate the applicants as more creditworthy and more financially sound when the obese version of the photograph was attached. However, when more solid information was provided, like the loan applicant’s income, collateral, and occupation, lenders used it, and the so-called obesity premium fell.