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Friday, September 14, 2007

Odd Results, interesting discussion

hat tip Mankiw for the post of a study that says a $1 increase in gas prices will likley lead to a 15% reduction in obesity.
The study seems solid to me, though I'm certainly not the foremost expert on any of it.
And yet, I just can't buy the results. It doesn't pass the sniff test. Mike Moffatt agrees.

One thing - the author uses data from a decade and more ago. A paper (see the right side of my blog) on gas price elasticity says that there is evidence in a dramatic decrease in the elasticity of gasoline demand. Obviously the author's results would be sensitive to elasticity changes. ....

Either way, there is a Great discussion about it on Mankiw's blog though. The author even makes a cameo!

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