Does Exercise Make You Rich?

Time to add to the BMA collection of academic studies on what makes people rich. Previous findings include that watching TV makes you poor, being smart does not help, and financial literacy classes reduce financial literacy.Weightlifter

Today’s entry is exercise. An economics professor at Cleveland State University has discovered that regular exercise will increase your pay. As the SmartMoney blog that brought this important finding to my attention put it, Want a 9% Raise? Hit the Gym.

Just to be clear, Professor Kosteas does not merely present a correlation between regularly working out and making more money. He argues cause and effect, that “Regular physical activity has been linked to improved mental function, psychological wellbeing and energy levels, all of which can result in increased productivity and translating into higher earnings.” (I could not find the final paper on-line for free. The quote is from a working draft.)

I never exercise. And I do not have a job. The wife hits the gym compulsively and is doing pretty well. So the correlation between pay and exercise should not surprise me. But it is not what I would have guessed.

Exercise is time consuming. And it seems to me that it would make a person too tired to do other stuff, although gym-addicts claim it gives them more energy. So I would have thought that people who work out more have that much less time to work, thus would make less money. The cliché of the high-powered professional is one who is borderline overweight and powered largely by caffeine, not a tri-athlete.

Alas, no. Turns out, people who exercise more make more money. At least that is what the data says. It has to be pointed out that both pay and exercise were self-reported in the data used for the paper. For the sake of argument, let us agree that nobody would ever lie about what they make or how often they go to the gym. Even so, taking this fact a step further, arguing that they make more money because they exercise more, is a step too far.

Kosteas makes a valiant effort, employing some esoteric statistical techniques but, in my opinion, falls short. It is a basic truth that it is very hard, and indeed usually impossible, to statistically demonstrate that the fact that A and B are correlated is due to A causing B, rather than B causing A or both being caused by C.

Sometimes you can do it logically. It would be very hard to buy the theory that lung cancer causes people to start smoking a few decades before they are diagnosed. Or that people carrying umbrellas causes rain.

This is not one of those cases. Kosteas’ theory, that exercise makes people healthy, happy, and energetic, which makes them better workers, is perfectly plausible. But there are reasonable B causes A explanations too. Perhaps higher paid people choose to spend a little less time working and more time on hobbies, such as toning up those abs.

And there are A and B both caused by C explanations. It is possible that diligent and responsible types, the ones that eat right and get enough exercise, make better employees. Or that better educated people tend to exercise more and are higher paid.

When you get down to it, the causal direction between health and exercise is not that unambiguous. It could be that the more frail among us tend not to exercise because they are not able and are also not as productive at work.

Do not get me wrong. Exercising more (and watching less TV, for that matter) is almost certainly a good idea for just about everybody, myself most certainly included. But it will not make us richer. Healthier, happier, and more energetic is good enough for me.

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