MICROFINANCE PAPER WRAP-UP: “Worth Your Weight: Experimental Evidence on the Benefits of Obesity in Low-income Countries,” by Elise Macchi

This paper examines how the perception of obesity as a symbol of wealth can yield financial benefits to overweight people in southern Uganda. The author applied computer software to photos of 34 test subjects to create 34 pairs of portraits, such that each pair comprises two portraits of the same person: one intended to convey that the person is “normal” per the body mass index (BMI) scale and the other intended to convey the person is “obese.”

Dr Macchi recruited 511 adults in Uganda and tasked them with assessing the portraits in terms of characteristics such as “wealth, beauty, health, longevity, self-control (ability to resist temptation), ability to get things done and trustworthiness.” The author found that the subjects in the obese-appearing portraits were more likely to be rated as wealthy by the respondents than those whose BMI appeared to be in the normal range. This was true regardless of the respondent’s age or gender.

Dr Macchi then conducted an experiment with 238 loan officers from 143 financial institutions to explore whether the perception of obesity impacts loan decisions. In this experiment, Dr Macchi constructed hypothetical loan applications using data from Ugandan residents of different demographic characteristics and then incorporated the portrait pairs into the loan applications. Each loan officer was asked to evaluate 30 hypothetical applications. Loan officers were more likely to rate applications with obese-appearing portraits higher in terms of “approval likelihood, creditworthiness and financial ability,” regardless of demographic characteristics.

First-time borrowers in Uganda usually self-report financial information in their loan applications, with verification performed after an initial meeting with a loan officer. Given the lack of verification at the time of the interview, Dr Macchi argues that loan officers use status symbols, such as obesity, to help screen applicants during their interviews. Thus those who appear to be of normal BMI may be discriminated against because of their weight, resulting in less access to credit.

This is a summary of a paper by Elisa Macchi; published on GitHub; October 2022; 91 pages; available at https://elisamacchi.github.io/files/wyw_cond_accepted.pdf.

By Rohit Dayanand, Research Associate

Additional Resources

Brown University press release on hiring Dr Macchi
https://economics.brown.edu/news/2022-09-01/elisa-macchi-join-economics-department-january-2023-assistant-professor

More research summaries from MicroCapital
https://www.microcapital.org/?s=wrap

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